REPUBLIKA.CO.ID, JAKARTA -- The composite share price index of the Indonesia Stock Exchange (BEI) closed at its highest level of 5,791 on Friday after Standard & Poor's raised the country's status to investment grade.

The BEI index was up 146.43 or 2.59 percent to 5,791.88 points, while the index of LQ45 blue chips rose 28.94 points (3.07 percent) to 970.39 at the close of that day.

NH Korindo Securities analyst Bima Setiaji said the Standard & Poor's decision to raise the country's status to investment grade was the sentiment behind the hike in the index.

"Share trading today was driven by sentiment from the S&P's decision to raise Indonesia's rating from BBB- (triple B minus) to an investment grade," he said.

According to BEI records, the last highest index was recorded on April 25, 2017 when it was closed at 5,726.53.

He further said he believed the country's current status would in future boost inflows of foreign funds into the securities or share market.

"With the investment grade status, financial risks of issuers will be smaller and in turn will increase valuation of their shares," he said.

Reliance Securities analyst Lanjar Nafi on the other hand said the investment grade status could boost attractiveness of Indonesian assets, while investors adopt a conservative stance towards global equities.

However, the significant hike in the index could provide a high momentum with correction probabilities that would cause limited strengthening, he added.

Lanjar also predicted the index would move between 5,700 and 5,830 next Monday.

Frequency of trading on Friday was recorded at 382,398 transactions, with a total of 8.822 million shares worth Rp8.298 trillion changing hands. A total of 230 shares rose while 98 dropped and 113 were stagnant.

On Friday, the Nikkei index closed 36.90 (0.19 percent) higher at 19,590.76, while the Hang Seng rose 38.35 points (0.15 percent) to 25,174.87 and the Strait Times strengthened by 1.41 points (0.04 percent) to 3,222.58.

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