Shares & Rupiah: Indonesia's Jakarta Composite Index at New Record
Despite generally thin trading in Asian markets, Indonesian shares rose further in record-high territory on Wednesday (27/12) supported by a rally in commodity prices (particularly crude oil and metals prices), and the announcement that Japan's Mitsubishi UFJ Financial Group plans to buy a majority stake in Bank Danamon Indonesia, Indonesia's fifth-largest lender.
The Mitsubishi UFJ Financial Group reportedly agreed to purchase a 73.80 percent stake in Bank Danamon Indonesia. The Japan-based group added that it would like to raise the stake to the full 100 percent in an effort to strengthen its presence in Southeast Asia's biggest economy. In the first trading session on Wednesday (27/12), shares of Bank Danamon Indonesia surged 14.58 percent to IDR 6,875 a piece.
Crude oil prices rose to a 2.5-years high after an explosion of a Libyan oil pipeline triggered concerns about supply disruptions. Meanwhile, gold and copper prices approach multi-week highs, hence boosting commodity- and energy-linked shares across Asia.
Other factors that impact positively on Indonesian shares are optimistic views about the Indonesian economy, the recent Fitch Ratings credit rating upgrade from BBB- to BBB, the stable rupiah exchange rate after the US Federal Reserve raised its benchmark interest rate again earlier this month, and seasonal window dressing ahead of the year-end (a strategy that is often used by mutual fund and other portfolio managers to improve the appearance of a fund's performance before presenting it to clients or shareholders).
During the first trading session on Wednesday (27/12), Indonesia's benchmark Jakarta Composite Index (IHSG) rose 0.48 percent to 6,250.99 points. Meanwhile, the Indonesian rupiah depreciated 0.04 percent to IDR 13,560 per US dollar (Bloomberg Dollar Index). Today, Indonesian markets re-opened after the Christmas holiday.
