Indonesian shares hit record high as new cbank chief approved
JAKARTA, March 27
JAKARTA, March 27 (Reuters) - Indonesia's benchmark share index extended gains to hit an all time high at 4,907.3 by midday Wednesday after parliament approved Finance Minister Agus Martowardojo's proposed switch to become the next head of the central bank.
The Jakarta Composite Index gained 1.29 percent from Tuesday close, with the finance sector sub-index up 1.93 percent, while Jakarta's blue chip index rose 1.37 percent.
Lenders Bank Mandiri and Bank Central Asia gained more than 3.5 percent to 9,850 rupiah and 11,050 rupiah, respectively.
Investors had expected Martowardojo to win parliament's backing, with market gaining more than 1 percent by the close on Tuesday, and attention will now switch to who succeds him at the finance ministry.
"Mr. Agus' style in monetary policy-making remains to be seen, but generally we do not expect to see any drastic change in Bank Indonesia's policy mix," Citibank economist Helmi Arman said.
"However, as the first governor with extensive private sector experience, the governor-elect may bring fresh perspectives into the board of governors, which mostly consists of career central bankers," Arman added.
Thendra Crisnanda, an analyst at BNI Securities in Jakarta, said the main challenges for economic policy-makers were reducing the current account deficit and instilling exchange rate stability.
Inflows into stocks and bonds helped the Indonesian rupiah recover to 9,730 to the dollar, after it had earlier struck 9,747 per dollar, its weakest since Feb. 1, according to Thomson Reuters data.
The country raised 7.65 trillion rupiah of government bonds at a debt auction, slightly more than a target of 7 trillion rupiah, a finance ministry official said. [ID: nJ9E8J903F]
"As long as exports keep dropping, the downward pressure on the rupiah will still persist," said a Jakarta-based trader.
Some traders expected a share offering of up to $1.36 billion in Matahari Department Store < LPPF.JK> to boost demand for rupiah..
1205 (0505 GMT)
(Additional reporting by Jongwoo Cheon in Singapore; Writing by Viparat Jantraprapaweth, Editing by Simon Cameron-Moore)