Indonesian Stocks Climb on Capital Injections in State-Owned Companies
After being in negative territory for quite a while, the benchmark stock index of Indonesia (Jakarta Composite Index) finished 0.13 percent higher at the end of the trading day. In line with the major stock indices in the Asia-Pacific region, Indonesia’s main index climbed although gains were limited as investors are concerned about failed discussions between the Greek government and its creditors in the Eurozone. However, positive sentiments were still felt due to capital injections in Indonesian state-owned companies.
On Wednesday (12/02), Indonesia’s House of Representatives (DPR) approved the central government’s proposal to inject capital into the country’s state-owned enterprises to support future growth. A total of USD $3 billion may be injected into 27 state-controlled companies, four of which - Adhi Karya, Waskita Karya, Krakatau Steel and Aneka Tambang - are listed on the Indonesia Stock Exchange (IDX). However, although Indonesia’s State-Owned Enterprises Ministry and the House’s Commission VI agreed on the capital injection, the decision is not final yet as it still needs to be discussed with the commission that oversees the budget as well as a plenary session in parliament.
The only capital injection that was rejected by Commission VI was the injection in publicly listed lender Bank Mandiri. This injection was not approved as this year’s main priorities are infrastructure, food security and micro-credit, not the financial sector.
The purpose of these injections is to boost economic development in Southeast Asia’s largest economy. The Joko Widodo administration is eager to construct power stations, ports, railroads and other infrastructure.
The Jakarta Composite Index climbed 0.13 percent to 5,343.41 points on Thursday (12/02).
Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.74 percent to IDR 12,794 per US dollar on Thursday 12/01).
| Source: Bank Indonesia‹ Kembali ke Berita Bursa Efek
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