Indonesian Stocks Rise 20% From Low in June, Set for Bull Market

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessIndonesian Stocks Rise 20% From Low in June, Set for Bull MarketA rally in Indonesian stocks put the nation’s benchmark index on track for a bull market, helped by a regional rebound as well as a recent credit-rating announcement.Author of the article:Bernadette Toh and Prima Wirayani You can save this article by registering for free here. Or sign-in if you have an account.pnpg]yg2fo)or55(8umqwyq]_media_dl_1.png Bloomberg(Bloomberg) — A rally in Indonesian stocks put the nation’s benchmark index on track for a bull market, helped by a regional rebound as well as a recent credit-rating announcement.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe Jakarta Composite Index jumped as much as 1.5% on Thursday to 6,430.76 points, extending gains since its early June low to 20%. Commodity heavyweights PT Amman Mineral Internasional and PT Barito Renewables Energy were top point advancers. Sentiment is on the mend in the world’s worst-performing stock market this year, as recently easing oil prices, Bank Indonesia’s cumulative 50-basis-point interest-rate hikes in June and S&P Global Ratings’s decision to maintain the nation’s rating and outlook helped stabilize markets.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“My view is the June 8 low will hold, as the market is increasingly pricing in stabilization rather than deterioration now,” said Mohit Mirpuri, a partner at SGMC Capital Pte in Singapore. Still, because Indonesia remains an under-owned market, “the cost of being wrong by waiting for the recovery has now become greater than the cost of being selectively early,” he added. Traders say that a large part of the rally has been driven by government efforts to shore up confidence across Indonesia’s struggling capital markets. Bank Indonesia unexpectedly held its benchmark rate at 5.75% on Wednesday and unveiled a range of incentives aimed at attracting inflows and supporting the rupiah. Meanwhile, officials have stepped up fiscal discipline efforts, including scaling back the country’s ambitious free lunch program.The rupiah strengthened by more than 1% on Thursday from its record low in early June, while the 10-year government bond yield slid more than 10 basis points from three-year highs reached later that month. Up 14% this month, the JCI has topped global benchmarks. Still, questions remain over the sustainability of the rebound. Despite the recent rally, the benchmark is still down some 26% this year as worries about market transparency and the direction of President Prabowo Subianto’s economic agenda persist. MSCI Inc. will still need to make a final call on whether to downgrade the nation’s equities to frontier status in November, as does S&P Dow Jones Indices, which has also signaled a possible reclassification.Fund flows suggest global money managers remain cautious. Foreigners continue to be net sellers of the country’s stocks on a daily, weekly, monthly and annual basis. While they’ve pulled $161 million this month, selling has eased from June’s more than $1 billion in outflows. The market has yet to price in reform measures to stave off any downgrades, with underweight positions from long-only investors “quite huge,” Rajiv Batra, JPMorgan Chase & Co.’s co-head for global emerging markets equity strategy, said in an interview with Bloomberg TV. Once they start pricing in that Indonesia will remain in the emerging-markets benchmark, and MSCI signs off on what policymakers have done, “I think the inflows will start coming back to Indonesia, and the rally will become much more sustainable for Indonesian equities,” he added. This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.