Jakarta share prices closed 1.13 percent higher on Thursday, with the main index finishing at a new record for the fourth straight day, dealers said. They said the market welcomed Bank Indonesia's move cutting its benchmark interest rate by 25 basis points to 8.25 percent following tame inflation data in June.
Although the rate cut had been widely expected, the market still reacted positively to the news. The Jakarta Stock Exchange composite index closed up 24.826 points or 1.13 percent at 2,220.931, beating the previous all-time high set Wednesday.
Volume was 4.89 billion shares worth 3.67 trillion rupiah (407.32 million dollars). Gainers led losers 128 to 59, while 65 stocks were unchanged. The Indonesian rupiah was trading at 9,017/9,022 per US dollar against 9,000/9,010 late Wednesday.
"After the BI rate cut, I would say that all the good news has already been factored into share prices. We can now expect investors to cash in some of their gains in coming days," Panin Securities analyst Nico Suherman said. He said investors may have to wait until Indonesian companies announce their second-quarter results next month for further incentives to buy.
Telkom rose 200 rupiah or 1.9 percent to 10,550 while United Tractors gained 650 rupiah or 7.8 percent to 8,950. Kuo Capital analyst Arif Sigita said the extended rally in Telkom was partly due to dividend expectations, as the company is scheduled to distribute its 2006 final dividend on August 8.
He said active buying in the mining sector also lifted sentiment in United Tractors. Fundamentally speaking, he said the outlook for Indonesia's mining industry is bright, which explains the current strong interest in mining stocks. Among miners, coal giant Bumi Resources rose 75 rupiah or 3.1 percent to 2,500 while rival Bukit Asam added 300 rupiah or 4.6 percent to 6,800.
Nickel miner Antam rose 300 rupiah or 2.4 percent to 12,900, Inco gained 650 rupiah or 1.1 percent to 58,650, while tin miner Timah climbed 400 rupiah or 3.3 percent to 12,500. Meanwhile, gas distributor Perusahaan Gas Negara rebounded from recent sharp falls. PGN corporate secretary Widyatmiko Bapang earlier said recent selling in the stock was an overreaction to the government's move to intervene in PGN's plan to hike gas prices. PGN rose 100 rupiah or 1.1 percent to 8,800.