RI shares end at 6.5 year high on bargain hunting

RI shares end at 6.5 year high on bargain hunting

Dow Jones, Jakarta

Indonesian shares surged sharply on Thursday, ending at a
fresh 6.5-year high as investors snapped up stocks after profit
taking in the previous two trading sessions, dealers said.

Dealers said they were surprised by the market's strong
rebound as they had expected investors to continue taking profit
Thursday.

"The sooner-than-expected market rebound underscores the
underlying bullish sentiment toward Indonesian stocks, which by
large are still relatively cheaper than those in other Asian
markets," said a dealer with a foreign brokerage company.

The Jakarta Stock Exchange Composite Index ended up 21.448
points, or 3 percent, at 730.815. This is its highest closing
level since July 10, 1997 when the index closed at 729.151,
according to JSX data.

Gainers led decliners 118 to 41, with 63 stocks unchanged.

Volume was robust, standing at 3.54 billion shares valued at
Rp 1.55 trillion (US$185 million).

Dealers said investors are likely trying to push the index to
its all-time high, before they begin to trim their portfolio
holdings ahead of the parliamentary elections in April. The index
hit an all-time high of 740.833 on July 8, 1997.

Heavyweight stock Telekomunikasi Indonesia rose Rp 250, or
3.4 percent, at Rp 7,500, and its rival Indonesia Satellite Corp,
gained Rp 200, or 1.2 percent, at Rp 16,500.

Automotive concern Astra International rose Rp 450, or 8.4
percent, at Rp 5,800 as the launch of new a car model this month
is expected to boost its car sales this year.

Indonesia's largest cigarette maker Gudang Garam increased
Rp 450, or 3.3 percent at Rp 14,200, and its rival HM Sampoerna
edged up Rp 150, or 3.4 percent at Rp 4,600.

Bank Lippo rose Rp 15, or 3.5 percent, at Rp 445 on news that
the Indonesian Bank Restructuring Agency has shortlisted a
consortium led by Austria's Raiffeisen Zentralbank Oesterreich AG
as the single bidder for a 52 percent stake in the bank. The
market sees this as good progress in the agency's effort to sell
the stake after it failed to attract attractive bids in October.

Dealers expect the strong gains in Thursday's session may
encourage other investors to jump into the market to buy shares
Friday. However, they aren't ruling out the possibility of profit
taking following the gains.

Other Asian markets closed mostly higher on Thursday, with the
Tokyo bourse advancing on the back of technology stocks.
Japan's Nikkei Stock Average of 225 issues rose 79.83 points, or
0.74 percent, to 10,837.65. The Hang Seng Index rose 45.91
points, or 0.4 percent, to 13,203.59, surpassing the previous 30-
month high of 13,157.68 set the day before.

The rupiah ended slightly higher Thursday as foreign players
sold the dollar due to its bearishness against most major
currencies, dealers said.

The dollar closed at Rp 8,345, down slightly from its close
Wednesday at Rp 8,365.

Continued profit-taking against the rupiah after the local
currency rose to a five-month high Tuesday drove the dollar to an
intraday peak of Rp 8,390 earlier Thursday. But the rise provided
a good opportunity for offshore players to build fresh dollar-
short positions, dealers said.

Dealers said the dollar's slide was likely also spurred by
capital inflows into the local stock market, which staged a 3%
rally Thursday to end at 730.815 points. Investors will be
swapping their dollars for rupiah to settle those purchases in
the coming days.