JAKARTA -- President Joko Widodo visited the Indonesia Stock Exchange (IDX) on Tuesday to witness the Jakarta Composite Index reach a new record high.
The index closed at 5,523.29, up 0.79% from the previous day, and the rupiah closed at 12,978.30 against the dollar, up 0.21%.
"The JCI closed at its highest level in history," Widodo told reporters after the session. "Investor confidence in the Indonesian economy has been very good. I'm very optimistic that the index will top 6,000 by the end of this year."
Widodo said that to maintain the current market momentum, "The government will continue spending on infrastructure projects."
He stressed that the government will streamline its process for granting permits so as to more smoothly disburse money in the budget earmarked for infrastructure projects. The government is also preparing to list several state-run enterprises on the IDX with the aim of further buoying market sentiment.
Help from the Fed
Ito Warsito, CEO of the exchange, said Tuesday that Indonesia's key stock index is one of the best-performing gauges in the region. The same day, the Shanghai Stock Exchange Composite Index closed 2.52% higher at 3,961.38, Japan's Nikkei Stock Average ended 1.25% higher at 19,640.54, and Hong Kong's Hang Seng Index rose 0.77% to 25,275.64.
Mirza Adityaswara, senior deputy governor of Bank Indonesia, said Monday that in addition to getting a boost from upbeat domestic sentiment, the rupiah is appreciating on expectations that the U.S. Federal Reserve will not likely hike rates for the time being.
Helmy Christanto, head of equity research at Danareksa Securities, said expectations for the new government -- especially regarding the acceleration of infrastructure development -- are running high. The analyst said market players are on the lookout for any signs that the government is making progress in executing its policies.
"We anticipate a more conducive environment for companies in the second half," Christanto said. As for stocks, "We continue to maintain an "overweight" rating for the market, and foresee the index ending the year at 5,900."