Local shares end up, rupiah shows promise

Local shares end up, rupiah shows promise

Dow Jones, Jakarta

Indonesian shares ended higher for the third straight session
on Wednesday amid growing expectations that the presidential
runoff will run peacefully next week, dealers said.

The stronger rupiah against the U.S. dollar also added to
positive sentiment, they said.

The main index, however, was off its intraday high as mostly
local investors took profit, they added.

"It could also mean that some investors were reluctant to
maintain strong buying positions given possible risks from the
elections," said a trader with Kuo Capital Securities.

The Jakarta Stock Exchange Composite index ended up 6.470
points, or 0.8 percent, at 815.486, down from an earlier high of
822.491.

Gainers led decliners 74 to 39, with 90 stocks unchanged.
Volume was 2.2 billion shares valued at Rp 1.5 trillion (US$164
million)

Carmaker Astra International led gainers, up Rp 100, or 1.5
percent, at Rp 6,850 on the company's plan to prepay $122 million
of loan later this month.

Dealers said investors bought shares in banks on expectations
of higher nine-month earnings.

Bank Mandiri rose Rp 25, or 1.8 percent, to Rp 1,450, and Bank
Rakyat Indonesia gained Rp 75, or 3.9 percent, at Rp 2,000.

Profit taking hit shares in Indonesian Satellite Corp., down
Rp 25, or 0.6 percent, at Rp 4,400, and cement maker Indocement
Tunggal Prakarsa, down Rp 75, or 3.8 percent, at Rp 1,900.

Dealers said they expect the market to trade flat to slightly
lower Thursday on profit taking after the main index rose 4.1% in
the previous three sessions.

Meanwhile, Indonesian rupiah ended flat as profit-taking
erased all of the local unit's gains posted earlier in the day.

The dollar ended at Rp 9,110, unchanged from its close on
Tuesday.

The U.S. currency fell to an intraday low of Rp 9,065 on
continued optimism that Monday's presidential runoff will be
smooth and result in market favorite Susilo Bambang Yudhoyono
beating incumbent President Megawati Sukarnoputri.

Two opinion surveys published Wednesday showed Megawati
heading for defeat despite having formed a coalition with the
country's largest party, Golkar.

A poll by the Washington-based International Foundation For
Electoral Systems showed that former military general Yudhoyono
has the support of 61 percent of voters, compared with 29 percent
who say they will choose Megawati.

A separate poll by the Indonesia Survey Institute gave
Yudhoyono 61 percent and Megawati 24 percent.

But profit-taking against the rupiah later in the day lifted
the dollar, dealers said.

The premium on the one-month dollar-rupiah forward rose to Rp
28, up from Rp 23 late Tuesday, as participants bought back the
dollar.

Dealers expect the dollar to trade between Rp 9,050 and Rp
9,150 in the spot market on Thursday.

Elsewhere, the benchmark weighted average rate on Bank
Indonesia's one-month Sertifikat Bank Indonesia, or SBI, notes,
edged up a tad to 7.39 percent in a twice monthly auction from
7.38 percent, as banks demanded a higher yield amid central bank
efforts to absorb excess liquidity.

But the slight increase showed that the central bank is still
reluctant to allow rates to rise sharply because this could hurt
economic growth and boost coupon payments on government's bonds.