Foreign investors need business certainty."
Jakarta (ANTARA News) - The Indonesian Stock Exchange (BEI) said the growing trend of the Jakarta composite index (JCI) could encourage initial public offering (IPO).

The JCI surged in the opening trade on Thursday morning on peaceful presidential election with popular candidate Joko Widodo (Jokowi) leading according to quick account.

The JCI opened 84.90 points or 1.69 percent higher at 5,109.62 points with 45 most liquid stocks gaining 2.59 percent to 881.63 points.

The market welcome the result of the election, market analysts said.

The market condition is positive and stable strengthening investors confidence in the countrys stock market, an official of the BEI said.

More companies may be encouraged to launch IPO, Valuation Director of the BEI Hoesen said here on Thursday.

Hoesen said he was optimistic the BEI target of recording at least 30 more companies to launch IPO this year could be reached especially as the presidential election had been concluded peacefully.

"So far this year 16 new companies have launched IPO on the BEI, and tomorrow on Friday two more companies are to have their shares listed on the BEI," he said.

Lender PT Bank Dinar Indonesia and property company PT Sitara Propertindo plan to float shares on July 11.

Bank Dinar plans to float 500 million shares at a price of Rp110 per units, and Sitara Propertindo wants to sell 4 billion shares at a price of Rp106 per unit .

"The election euphoria would boos the BEI index to stay in a positive area," Hoesen said, adding BEI would continue to create positive expectation for investors that Indonesian capital market industry will continue to record good performance.

Analysts predicted the index would continue to gain until the end of this year welcoming the election of a new president.

"The result of quick count alone has shown a concrete change in the JCI from less than 5,000 points to 5,122 popints," head of the branch of Sentra Investasi Danareksa in Semarang Melcy RS Makarawung said in the Central Java provincial city.

Melcy predicted the JCI could climb to as high as 5,250 points by the end of this year and it would continue to gain next year.

"Correction if it did happen would not bring down the JCI to less than 5,000 points . We also predicted that rupiah would follow to regain its losses in value against the US dollar," he said.

He said who ever is to be the next president investors would feel safe with elections well under control.

Official announcement of the winner would be known only on July 22 although all leading independent surveys showed the result favoring Joko Widodo and his running mate M. Jusuf Kalla.

Melcy said withb the result of the election based on the quick counts a number of foreign companies would agree to renegotiate their investment contracts such as US copper and gold miners Newmont and Freeport and US oil company Exxon Mobil.

"Foreign investors need business certainty. The result of the election would promise certainty that would encourage investors to do business in the country," he said.

Melcy the result of election would also have big impact in the stock market , which is still dominated by foreign companies.

He said foreign companies account for 60-65 percent of the BEI market value.
(Uu.H-ASG/O001)

Editor: Priyambodo RH
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