Jakarta shares up; Telkom gains on dividend hopes
Jakarta shares up; Telkom gains on dividend hopes
Dow Jones, Jakarta
Jakarta shares ended higher on Friday led by further foreign buying in bellwether Telekomunikasi Indonesia amid hopes that the company will pay a higher 2004 dividend, dealers said.
"Gains in Telkom spurred buying in other blue chips that have solid fundamentals," said a trader with Andalan Artha Advisindo.
She added that underlying sentiment regarding Indonesian shares remains positive for foreign investment amid expectations that economic growth will pick up pace this year.
The government expects the economy to grow by 6 percent this year compared with 5.4 percent in 2004.
Dealers said continued rallies across Asian markets also boosted buying on the local bourse.
The Jakarta Stock Exchange Composite index ended up 1.4 percent, or 16.06 points, at 1,141.82.
Gainers led decliners 88 to 25, with 71 stocks unchanged. Volume was 1.5 billion shares valued at Rp 1.7 trillion, compared with 1.4 billion shares valued at Rp 1.5 trillion on Thursday.
Telkom rose 5.6 percent to Rp 5,200 on expectations that it will put aside more than 50 percent of its 2004 net profit for dividend payment.
Telkom's rival Indonesian Satellite (Indosat) gained 3.7 percent to Rp 5,650 on expectations of improved first-half earnings.
Dealers said foreign investors also bought shares in gas producer Perusahaan Gas Negara on its solid business outlook.
"We think that the outlook for the natural gas industry is attractive and that the company is uniquely positioned given its monopoly status in the market," said UBS in a research note. Perusahaan Gas jumped 7.3 percent to Rp 3,325.
Shares in automotive company Astra International fell 3.3 percent to Rp 13,150 on profit taking and as the shares traded ex-dividend.
Dealers said they expect the market to trade higher on Monday on further foreign program buying ahead of the close of the first-half book by the end of June.
On the currency market, the rupiah ended steady as investors squared their positions while awaiting details about the central bank's plan to tighten foreign-exchange trading next month, dealers said.
The dollar closed at Rp 9,620, unchanged from its close on Thursday. The rupiah fell to an intraday low of Rp 9,653 before recovering.
"Investors squared their position ahead of the central bank's plan to brief bankers over its new policy on Monday," said a trader with a foreign bank.
Dealers also attributed the retreat of the greenback from its highs on Friday to profit taking by foreign funds after recent gains.
Bank Indonesia said in a regulation issued late on Wednesday that effective July 14, it will cut foreign-exchange derivative transactions by banks here with foreign counterparts against the rupiah to a maximum of $1 million from a previous total of $3 million.
Dollar purchases in outright forward transactions and swaps are also limited to a $1 million total. These types of transactions previously weren't subject to any cap.
The central bank also imposed a three-month minimum investment hedging period on foreign-exchange transactions.
That stipulation means investors with underlying investments in Indonesia must keep their funds in the country for at least three months, an official with the central bank said.
Previously, such deals had no minimum time period.
Analysts said the new move may not help the central bank achieve its goal of helping the rupiah, as genuine dollar demand from local companies to pay offshore obligations -- including rising import bills -- remains robust.
Dealers expect the dollar to trade between Rp 9,580 and Rp 9,650 on Monday.