Jakarta shares end higher, led by gains in Bank Mandiri

Jakarta shares end higher, led by gains in Bank Mandiri

Dow Jones, Jakarta

Indonesian shares ended higher on Thursday led by a rebound in Bank Mandiri on hopes pending corruption charges against three top executives in a lending scandal will improve the bank's corporate governance and financial fundamentals, traders said.

Dealers said gains in several Asian markets improved sentiment on the domestic bourse, but lingering worries that the central bank would continue to raise its key interest rate prevented investors from taking up strong buying positions.

The Jakarta Stock Exchange Composite Index ended up 6.750 points, or 0.6 percent, at 1063.83.

The main index had fallen more than 2 percent in the previous two sessions.

Gainers led decliners 89 to 36, with 62 stocks unchanged.

Volume was 1.1 billion shares valued at Rp 1 trillion, compared with 1.2 billion shares valued at Rp 1.2 trillion on Wednesday.

Bank Mandiri, the nation's largest lender by assets, gained 1.8 percent to Rp 1,690.

Indonesia's Attorney-General's Office (AGO) announced on Wednesday that the state-owned bank's senior executives, including Chief Executive Edwin Neloe, are officially suspects in a scandal involving loans worth more than Rp 1 trillion.

Traders said gains in Bank Mandiri spurred investors to buy back other blue chips that fell recently.

Car maker Astra International rose 1.4 percent to Rp 11,150 on a rebound and expectations of higher first-half earnings due to an increase in car sales.

Also higher was heavy equipment company United Tractors, which gained 3.3 percent to end at Rp 3,175 on solid first quarter earnings.

Dealers expect the market to trade slightly higher on Friday on further buying in Bank Mandiri.

Meanwhile, the rupiah closed slightly lower on the dollar's rebound versus other major rivals.

But expectations of capital inflow later this month linked to the acquisition of a local cigarette company helped limit the rupiah's loss, dealers said.

The dollar closed at Rp 9,470, up from its close on Wednesday at Rp 9,450.

"The dollar/rupiah tracked the dollar's rise versus most regional currencies, but players were keen to sell it back near Rp 9,500 on expected capital inflows linked to Philip Morris' acquisition of Sampoerna shares," a dealer said.

The U.S. tobacco company will close a tender offer to buy another 60 percent shares in Sampoerna from public shareholders next week after having bought a 40 percent stake in the country's third-largest cigarette maker earlier this year.

The whole deal is valued at around $5.2 billion.

Dealers expect the dollar to trade between Rp 9,440 and Rp 9,500 on Friday.