ASEAN KEY DESTINATIONS
Indonesian bourse may rise above record
The Jakarta Composite Index still has room to grow by as much as 8 percent, Edwin Sinaga, chief of brokerage company Financorpindo Nusa, said on Sunday.
The JCI has risen 7.4 percent this year, extending the 46 percent gain it posted last year.
The banking sector will be the likeliest to push the stock's measure beyond the 4,300 level, according to Edwin, but global market upsets still pose a threat to the JCI's growth.
Loans grew by 23.5 percent to Rp 372.8 trillion ($43.8 million) in the first half of this year, on track to meet the target growth of 23 percent to 24 percent full year, according to Bank Indonesia.
The key index closed on Friday up 1.6 percent at 4,003.69.
Stocks are benefiting from accelerating economic growth and low interest rates. The state forecasts gross domestic product to rise to 6.5 percent this year after gaining 6.1 percent last year.
The central bank has kept its key rate steady at 6.75 percent since the first quarter.
Official data recently showed that inflation had been steady, reducing pressure from the central bank to raise rates.
Last month, the nation's annual core inflation, which does not include food prices, was at 4.63 percent, dropping slightly from 4.64 in May.
"The economy, forecast to grow 6.5 percent, will still be the main factor, and our stocks are still sexy for investors," Edwin said. "The banking sector is relatively stable, while mining and other commodities are dependent on volatile crude oil prices."
The broker said external factors such as Greece's debt crisis and the pace of the US economic recovery were still key concerns.
Felix Sindhunata, an analyst at Henan Putihrai, said the strong domestic economy could boost the JCI by another 10 percent to 4,400.
"The index may even exceed the 4,400 level but it's not going to be lower than that," he said.
For the second half of this year, he expects a better performance by consumer-oriented companies, as the school holiday and the Muslim fasting month of Ramadan in August push Indonesians to spend more on goods such as clothes and vehicles.
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