Rendi A. Witular, Jakarta – The Jakarta Composite Index took a strong jump on the first day of 2004 trading on Monday, closing at above 700 – the highest in more than four years – as optimism pervaded regional stock markets and the government announced improved key economic indicators.
The Index ended higher on Friday, its highest since June 1999, rising by 1.8 percent or 12.603 points to 704.498 after failing to post a new record on Tuesday, the last trading day of 2003, due to profit-taking.
State-owned telecommunications company PT Telekomunikasi Indonesia (Telkom) led the climb in the Index as it surged by Rp 300 to Rp 7,050. Telkom is the largest counter on the Jakarta Stock Exchange (JSX).
Cigarette company PT Gudang Garam, the second largest counter, also rose by Rp 100 to Rp 13,700. State-owned tin producer PT Timah was also among the gainers as it surged by Rp 375 to Rp 2,925, its highest in more than three years.
Another mining company, PT International Nickel, was also tailing the lead with a sharp increase in its shares by Rp 5,200 to Rp 40,100.
Jasso Winarto, a stock analyst with Sigma Research Institute, said that the surge was mainly fueled by the jump in several benchmark stock indexes in Asia.
In Hong Kong, the Hangseng Index jumped by 225.54 points or 1.79 percent to 12,801.48, and in Taiwan the Weighted Price Index surged by 150.87 points or 2.6 percent to 6,041.56.
South Korea's Composite Stock Price Index (Kospi) also ended higher by 10.55 points or 1.3 percent to 821.26, and the Singapore Straits Times Index soared by 26.83 points or 1.5 percent to 1,791.35.
Markets were closed in Japan, the Philippines and Thailand for new year holidays.
"Global stock markets are now experiencing the seasonal upward trend of 'January Fever', in which most usually end trading higher in the early week of the month. This condition is and will be followed by the local bourse," said Jasso. He explained that "January Fever" developed as fund managers had been using their time during the December holiday to meet chief executive officers of publicly listed companies to get firsthand information on their business prospects in 2004.
The fresh information was later used as a guideline by the fund managers to invest in the stock market, he said.
Elsewhere, an analyst with a state-owned brokerage house said that an improvement in several economic indicators, as announced by the Central Statistics Agency (BPS) on Friday afternoon, had also contributed to the jump in the Index.
"The surge is also caused by positive economic indicators. We have had the lowest record of inflation in four years, and a 6.3 percent increase in year-on-year export. This is a relatively good sign," he said.
BPS announced that inflation had only increased by 5.06 percent in 2003 compared to 2002. Exports also rose by 6.3 percent to US$55.6 billion during the first 11 months of 2003 from the same period of 2002.
The Index skyrocketed in 2003 by 62.8 percent at 691.895 from 424.945 at start of the year, making it the second best performer in Southeast Asia after SET Thailand, which surged by 116.6 percent, and the third in Asia after Thailand and India.
India BSE Sensitive surged by 72.9 percent.