Dow Jones

Dow Jones Jakarta

Indonesian shares ended marginally higher on Wednesday, with rebounds in cigarette maker Gudang Garam and carmaker Astra International keeping the main index in positive territory, dealers said.

"If you look at the trade volume and value today, it is obvious that the market slightly recovered from its recent sluggish performance," said a trader with Andalan Artha Advisindo.

She added, however, that buying wasn't that strong because of worries over rising interest rates and losses in other Asian markets.

The Jakarta Stock Exchange Composite Index ended up 3.906 points, or 0.4 percent, at 1,049.056.

Gainers led decliners 50 to 46, with 66 stocks unchanged.

Volume was 1.9 billion shares valued at Rp 1.1 trillion, compared with 990 million shares valued at Rp 590 billion on Monday. The market was closed on Tuesday for a holiday.

Gudang Garam rose 4.1 percent to Rp 13,850 on bargain-hunting and on news that its rival Hanjaya Mandala Sampoerna will be excluded from the main index calculation after Philip Morris acquired a 98 percent stake in the company.

"Investors bought back Garam, which has become the only tobacco blue chip left on the bourse that has good liquidity," said a trader with a foreign securities firm. Garam's floating shares on the bourse are at 26.14 percent.

Astra International gained 0.9 percent to Rp 10,800 on a rebound after falls on Monday.

Bank Mandiri, the nation's largest lender by assets, gained 1.8 percent to Rp 1,690 on a late rebound and after the company said it is proposing to merge with Bank Negara Indonesia. BNI lost 1.2 percent to Rp 1,280.

Dealers said investors continued to sell other bank stocks on interest rate worries.

Bank Rakyat Indonesia lost 0.9 percent to Rp 2,750 and Bank Danamon dropped 2.7 percent to Rp 4,600.

The Indonesian central bank's one-month benchmark interest rate is currently at 7.90 percent. It is widely expected to climb, but stay below 8.0 percent.

The central bank has said it will continue to raise interest rates for the remainder of the year to stem inflation.

Analysts said a higher interest rate could reduce the net interest margins of banks and may increase the debt-servicing costs of many companies.

Dealers said they expect the market to trade higher on Thursday led by follow-through buying in Gudang Garam.