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Stocks

Indonesian market up on hopes for new government

JAKARTA -- Asian stock markets turned in mixed results Monday, with Indonesian shares continuing to rise slightly on strong support for President Joko Widodo's policies as Malaysian shares fell on fears that declining crude oil prices will hurt corporate earnings.

     The Jakarta Stock Exchange Composite Index rose 0.3% from the end of last week to close at a roughly two-month high of 5,164.29. The index is above where it was when Widodo took office Oct. 20. Equities have gotten a boost from China's economic recovery and expectations that importers will get a bump in profits from cheaper crude. Support for the president, who took the unpopular step of raising fuel prices, is also propping up the stock market.

     Real estate shares are doing especially well. Ciputra Development  and Lippo Karawaci  have both topped their Oct. 20 prices.

     "The new government will attract investment from abroad, leading to higher prices for real estate around industrial parks," an official at a local brokerage predicts.

     Indonesia's central bank raised interest rates in November to curb the inflationary effects of the fuel price hike. Although higher interest rates typically cause real estate sales to slow, investors appear to harbor strong expectations that demand will grow over the medium to long term.

     Speculation that the government will ease restrictions on home purchases by foreigners has also led to buying. In response to overheating in Jakarta's real estate market, the central bank put new requirements in place last year for down payments by homebuyers. Depending on the government's policies, disappointed investors may dump their shareholdings.

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