Jakarta shares end up; Indosat rises
Jakarta shares end up; Indosat rises
Dow Jones, Jakarta
Indonesian shares reversed early losses to end slightly higher
on Wednesday as bargain-hunters reentered the market, dealers
said.
"Bargain-hunters reentered the market quicker than we expected
as most blue chips still looked overbought," a dealer with a
local securities firm said. "It likely showed that investors are
strongly confident in Indonesia."
The Jakarta Stock Exchange's Composite Index closed up 0.1
percent, or 1.369 points, at 1134.692, after having been as low
as 1121.816 intraday.
Gainers led decliners 62 to 53, with 66 stocks unchanged.
Volume traded was 1.5 billion shares valued at 1.4 trillion,
compared to 1.6 billion shares valued at Rp 1.4 trillion on
Tuesday.
Leading the rise, Indonesian Satellite, the country's second-
largest telephone company after rival Telekomunikasi Indonesia,
added 1.8 percent to Rp 5,550.
Bank Mandiri gained 0.4 percent to Rp 1,520.
Second liners also attracted investor interest, with state-run
gold and nickel miner Aneka Tambang rising 2.1 percent to
Rp 2,400, the local unit of Canadian's Inco, Inco Indonesia,
advancing 2.1 percent to Rp 14,650 and plantation concern Astra
Agro increasing 2.6 percent to Rp 4,000.
Indonesia's largest telecommunications service provider
Telekomunikasi Indonesia, or Telkom, fell nearly 2 percent to
Rp 5,000 on news of a corruption investigation into the company.
Cigarette maker Gudang Garam dropped 0.4 percent to Rp 12,500
because its cigarette sales are expected to be hurt by the
government move next month to raise minimum cigarette prices.
Dealers expect further bargain-hunting on Thursday, but high
oil prices globally could continue to cloud market sentiment.
The Indonesian rupiah rose Wednesday due to likely market
intervention by the country's central bank and the U.S. dollar's
weakness against other currencies, dealers said.
The dollar closed at Rp 9,648, down from its close on Tuesday
at Rp 9,665.
The rupiah also benefited from an easing in dollar demand from
local corporates, dealers said. Much of that demand was on behalf
of state oil importer Pertamina, which is scrambling to comply
with a government directive to increase its fuel reserves to
cover consumption for 20 days from a current level of 12 days.
"Basically, today was a quiet trading day compared to
yesterday's volatility, but again the dollar demand for local
corporates is still healthy for the same reason of importing
oil," a dealer said.
"Also, we see some dollar-selling by state banks, probably on
behalf of the central bank as part of its regulatory role in
preventing the dollar from rising too fast (against the rupiah)."
The dollar's weakness against other major currencies also
helped the rupiah. The dollar fell to HK$7.7706 on Wednesday from
HK$7.7743 on Tuesday due to renewed speculation about a possible
revaluation of the Chinese yuan. Against the New Taiwan dollar,
the U.S. dollar closed at NT$31.355, down from NT$31.390 on
Tuesday.
Indonesia's looming implementation of tighter forex trading
rules has also severely trimmed speculative trading in the
rupiah, traders said.
Bank Indonesia will implement next month regulations that will
restrict the amount of dollars banks can borrow from offshore
counterparts without underlying transactions at $1 million.
Previously, there was no cap on the amount.
Central bank officials have said that the move is aimed at
reducing the amount of speculative offshore money coming into
Indonesia, which can destabilize the exchange rate.
"Domestic flow is the main driver (of dollar demand)," a
dealer said. "Since the regulations came out, I think speculative
flows have very much reduced."
Dealers expect the dollar to trade between Rp 9,630 and Rp
9,680 on Thursday.