Indosat pushes index to new high

Agencies, Jakarta

Indonesia's key stock index rose to its highest in almost four years on optimism promised new loans for the government will boost economic growth. PT Indonesian Satellite Corp. and PT Gudang Garam led the advance.

The Jakarta Composite Index rose 3.416, or 0.5 percent, to 656.740, the highest since Jan. 21, 2000, at the 4 p.m. market close in Jakarta.

Within the index, 36 shares rose, 57 fell, while 243 were unchanged. The benchmark rose 2.9 percent this week, its third weekly advance.

Indonesian Satellite, or Indosat, the country's main overseas call operator, rose 800 rupiah, or 5.8 percent, to 14,600. Gudang Garam, the country's biggest cigarette maker by volume, rose 200 rupiah, or 1.5 percent, to 14,000.

Foreign investors continued to buy local blue chips ahead of the listing of gas utility PT Perusahaan Gas Negara Monday, pushing the main index higher, dealers said.

Dealers said local investors took profit on second-liner stocks such as Bank Lippo, which fell Rp 25, or 5 percent, to Rp 475, mining company Bumi Resources, which dropped Rp 20, or 5 percent, to Rp 380, and tire maker Gajah Tunggal, which lost Rp 25, or 4.4 percent, to Rp 550.

Shares in cement-maker Semen Gresik slid Rp 200, or 2.4 percent, to Rp 8,100, after Mexico's Cemex SA Thursday filed a request with an international court to act as an arbiter in a dispute with the Indonesian government over the control of Gresik.

Bank Internasional Indonesia increased 10.5 percent, or Rp 10, to Rp 105 on optimism that the impending entry of South Korea's Kookmin Bank and Temasek Holdings Pte. Ltd., the Singapore government's investment arm, into the bank will improve its performance, dealers said.

Dealers said they expect the local stock market to continue rising next week on window dressing as fund managers try to boost the value of their portfolios ahead of year-end.

Meanwhile, the rupiah ended higher Friday with the Indonesian Bank Restructuring Agency suspected of converting some of its dollar proceeds into rupiah, dealers said.

The dollar closed at Rp 8,477, down from its close Thursday at Rp 8,495.

The government agency is expected to transfer some of the funds it has raised to state coffers next week, dealers said.

Dealers said diminishing dollar demand from local companies had paved the way for the dollar's fall.

"Dollar demand from local companies abated in the afternoon session, which is likely to leave room for the dollar to slide further next week," a dealer at a foreign bank said.

Dealers expect the dollar to trade between Rp 8,460 and Rp 8,500 next week.