Blue chips push shares down

Blue chips push shares down

Dow Jones, Jakarta

Shares ended lower on Tuesday led by telecom and consumer blue
chips amid security concerns ahead of the presidential run-off in
September, dealers said.

"Selling occurred almost across the blue-chip board," said a
trader with BNI Securities.

The Jakarta Stock Exchange Composite index ended down 10.505
points, or 1.4 percent, at 738.866, off an intraday low of
731.055. Decliners led gainers 84 to 17, with 90 stocks
unchanged. Volume was 1.2 billion shares valued at Rp 507
billion.

Leading decliners were Index heavyweight Telkom and consumer
goods producer Unilever Indonesia.

Telkom fell Rp 250, or 3.3 percent, to Rp 7,400 on profit-
taking after the company Monday closed registration for its 2003
dividend of Rp 302 a share.

Unilever dropped Rp 150, or 4.2 percent, to Rp 3,400 on talk
the company plans to issue rights shares.

Also lower were shares of cigarette maker Gudang Garam, down
Rp 350, or 2.7 percent, at Rp 12,750 on expectations the company
will book lower full-year earnings this year due to rising clove
prices.

Cement maker Semen Gresik bucked the trend, gaining Rp 100, or
1.3 percent, to Rp 9,850 on expectations the company will
complete its 2002 and 2003 financial audit by October.

Dealers expect the market to trade lower Wednesday on further
selling in select blue chips.

Meanwhile, the rupiah closed slightly lower Tuesday as local
companies continued to buy dollars to pay offshore debts maturing
at the end of the month.

A government bond auction in the local market helped the local
currency to reduce its losses, dealers said.

The dollar finished at Rp 9,275, up from its close of 9,265
Monday.

Local companies are saddled with offshore borrowings estimated
at $60 billion. Payment of maturing debts frequently dogs the
local currency.

"Demand for the dollar was quite healthy as local companies
bought the unit almost at the same time," said a dealer with a
foreign bank in Jakarta.

The dollar touched an intraday high of 9,310 earlier in the
day but selloffs from foreign market participants late afternoon
cut its gains.

Dealers said offshore investors likely sold the U.S. unit to
settle their purchases of government bonds in an auction Tuesday.

The government issued Rp 3 trillion in 10-year bonds in the
auction, with weighted average yield of 11.74 percent.

Dealers said Bank Indonesia is also suspected to have sold
dollars via state banks to defend the local unit.

"We are always ready to intervene if necessary," Bank
Indonesia's Deputy Governor Aslim Tadjuddin told Dow Jones
Newswires. But he declined to confirm if the central bank
actually sold dollars Tuesday.

Dealers expect the central bank to remain in the market at
least for the rest of the week as dollar demand from local
companies is not expected to evaporate as yet.

They expect the dollar to trade between 9,250 and 9,300
Wednesday.