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Southeast Asian stock markets rose on Friday as a larger-than-expected bond-buying decision of the European Central Bank lifted the sentiment in risk assets, and helped Indonesia notch a record high and Singapore a 20-month peak.
The European Central Bank launched a government bond-buying programme which will pump hundreds of billions in new money into a sagging euro zone economy.
Jakarta’s composite index (JCI) was up 1.3 per cent at 5,319.53, after hitting an all-time high of 5,324.34.
Foreign investors led the buying in large-caps and banks gained before earnings releases. Astra International rose 3.2 per cent to its highest since August, while Bank Central Asia climbed 1.1 per cent to a more than one-month high.
Stronger foreign inflows to the region due to higher liquidity are expected to be tentative, brokers said.
Bahana Securities maintained its JCI target for 2015 at 5,900.
“This is because the Indonesian market is more USD centric. Thus far we did not benefit from QE in Japan nor in the euro zone, as investors would have to convert to USD first, resulting in currency risks,’’ said head of research Harry Su.
“Nevertheless, our market should benefit from improved sentiment.’’
Singapore’s Straits Times Index was up 1.1 per cent at 3,409.28. It earlier hit 3,412.08, the highest since May 2013. Shares of DBS Group Holdings and Singapore Telecommunications were among the actively traded.
The rally helped Indonesia and Singapore to head for a weekly gain of more than 3 per cent, the biggest for both since March last year. Malaysia and Thailand are also on course for a more than 3 per cent weekly gain.
The Philippines and Vietnam are also set to extend gains for a fifth straight week. Manila-based Regina Capital maintained a year-end target for the Philippine index at 7,800, citing high valuations. The index was last trading at 7,506.95, up 1.2 per cent.
“The PSEi is not as cheap as it was when the Fed began its stimulus program. We’ll stick with 7,800 for now, but there’s a strong chance we may hit that target before the year ends,’’ said analyst Jason Bibit.
Asian shares extended a global rally, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.9 per cent.
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