RI bourse ends lower on profit-taking

RI bourse ends lower on profit-taking

Dow Jones, Jakarta

Indonesian shares ended lower Monday led by profit-taking in select banking blue chips amid renewed worries that the central bank may further raise interest rates to defend the rupiah, dealers said.

They said losses in several Asian markets and the prolonged political uncertainty ahead of the second round of presidential polls in September also discouraged investors.

"Many investors are still reluctant to hold equity portfolios for a longer term," said a trader with a foreign securities firm.

The Jakarta Stock Exchange's composite index ended down 1.822 points, or 0.2 percent, at 754.273. The main index rose 1.4 percent Friday on bargain-hunting.

Decliners led gainers 46 to 32, while 75 stocks were unchanged.

Volume was 1.25 billion shares valued at Rp 447 billion (US$49 million).

Indonesia's largest lender Bank Mandiri ended down Rp 25, or 2 percent, to Rp 1,200 and Bank Rakyat Indonesia lost Rp 50, or 2.9 percent, to Rp 1,675.

Index heavyweight Telekomunikasi Indonesia fell Rp 50, or 0.7 percent, to Rp 7,700 on profit-taking. The stock gained 4 percent Friday.

Telkom's rival Indonesian Satellite Corp. shed Rp 25, or 0.6 percent, to Rp 4,150.

Cigarette maker Hanjaya Mandala Sampoerna, however, jumped Rp 300, or 5.6 percent, to Rp 5,650, after the company reported its first-half sales rose 17 percent on year to Rp 8.15 trillion.

Dealers said they expect the market Tuesday to trade flat to slightly lower on further profit-taking.

The rupiah ended lower Monday as foreign market participants bought back the dollar in the afternoon session ahead of expected demand from local companies for the U.S. currency, dealers said.

Local companies usually start buying the U.S. unit in the last two weeks of a month to pay for maturing offshore obligations.

The dollar closed at 8,960 rupiah, up from its close at Rp 8,895 Friday. The U.S. unit found intraday support at

Rp 8,880, thanks to bids from local companies, which prompted foreign players to buy the currency.

"It seems that the dollar will slowly rise to around Rp 9,000 toward the month-end on demand from local companies," a dealer said.

The market didn't react to Friday's enactment of a new Bank Indonesia regulation that requires banks to keep their maximum foreign exchange net open positions at 20 percent of their equity capital at all times. Previously, the ruling was applicable only at the end of a trading day. Dealers said the market has discounted the measure as the central bank had announced its intent as early as May, when the rupiah fell to two-year lows.

Overall, trading remained thin as most players are still on the sidelines in the run-up to the second round of presidential elections Sept.20, dealers said.

Around 150 million Indonesians will cast their votes again after a first-round election earlier this month failed to produce an outright winner.

Incumbent President Megawati Sukarnoputri is widely expected to face market-favorite Susilo Bambang Yudhoyono in the September poll.

Dealers expect the dollar to trade between Rp 8,900 and Rp 9,025 Tuesday.