JSX index up on telecom shares gains

JSX index up on telecom shares gains

Dow Jones, Jakarta

Indonesian shares ended slightly higher on Tuesday, with further gains in Indonesian Satellite (Indosat) and a rebound in Telekomunikasi Indonesia (Telkom) driving the main index to a record closing high, dealers said.

"Late buying in Telkom and Indosat on hopes of higher 2004 earnings pushed the main index higher," said a trader with Kuo Capital Securities.

Dealers said overall sentiment remained cautious, weighed down by the weakness of the rupiah against the U.S. dollar and losses in many Asian markets.

After staying in negative territory for most of the session, the Jakarta Stock Exchange Composite Index ended up 1.042 points, or 0.1 percent, at 1152.60.

Decliners, however, led gainers 85 to 51, with 86 stocks unchanged.

Volume was 2.9 billion shares valued at Rp 2.7 trillion, compared with 5 billion shares valued at Rp 3.6 trillion on Monday.

Indosat gained 4.6 percent to Rp 5,100 on a rebound and expectations that it will book higher 2004 net profit. Indosat's rival Telkom rose 1.1 percent to Rp 4,575 on bargain hunting. Both companies are expected to announce their 2004 earnings next week.

Also higher were shares in Bank Mandiri, which gained 2.6 percent to Rp 1,760, on a rebound after falling 3.9 percent on Monday.

Profit-taking hit shares in Bank Danamon which dropped 3.7 percent to Rp 5,150 and cement maker Semen Gresik, which lost 2.8 percent to Rp 17,400.

Dealers expect the market to trade higher on Wednesday on further buying in telecommunication blue chips.

Meanwhile, the rupiah ended slightly higher on profit taking from the dollar's recent rise against the local unit, dealers said.

The dollar closed at Rp 9,395, down slightly from its close Monday at Rp 9,405.

Earlier in the day, the central bank intervened to sell dollars after the U.S. unit touched an intraday high of Rp 9,428.

Bank Indonesia Governor Burhanuddin Abdullah told reporters the bank sold dollars on Tuesday and will continue to do so as necessary. He didn't elaborate.

The central bank is suspected of frequently intervening in the spot market when the local unit is under selling pressure.

Dealers suspected on Tuesday the central bank sold the greenback via a state bank when the dollar rose to Rp 9,428, a level not seen since late June 2004.

"The dollar could have risen to Rp 9,450 if Bank Indonesia hadn't intervened," a dealer said.

While Bank Indonesia's intervention succeeded in preventing the dollar from rising further, it was profit taking that pushed the unit below Monday's close, dealers said.

Demand for dollars has been robust lately due to rising international oil prices and anticipation of a further rate hike in the U.S.

The U.S. Federal Open Market Committee is widely expected to increase the federal funds target rate by 25 basis points to 2.75 percent at a meeting on Tuesday.

Dealers expect the dollar to trade between Rp9,380 and Rp 9,425 on Wednesday.