RI shares end at record high on earnings reports

RI shares end at record high on earnings reports

Dow Jones Jakarta

Indonesian shares ended higher on Tuesday as gains in cigarette and mining blue chips on solid first quarter earnings drove the main index to hit a record high, dealers said.

However, they said concerns over the violence in the eastern Maluku Islands and losses in many regional markets provided ammunition for local investors to take profit, capping gains.

Fighting between Muslims and Christians in the Maluku islands has left at least 24 people dead in the past three days.

"The rise (in the main index) shows that the underlying sentiment toward Indonesian shares remain positive," said a trader with a foreign brokerage firm.

The Jakarta Stock Exchange Composite Index ended up 6.414 points, or 0.8 percent, at 818.159.

Gainers led decliners 69 to 51, with 74 stocks unchanged.

Volume was 1.65 billion shares valued at Rp 1.12 trillion (US$129 million).

Nickel miner Inco led gainers, jumping Rp 2,350, or 6.4 percent, to Rp 38,900 after it reported last week that its first quarter net profit rose nearly fivefold to $73.43 million due to an increase in nickel prices.

Cigarette maker Sampoerna gained Rp 200, or 3.9 percent, to Rp 5,300 after it said its first quarter net profit rose 18 percent due to an increase in sales. Sampoerna's rival, Gudang Garam, ended up Rp 100, or 0.7 percent, at Rp 14,700.

Also higher were shares in Bank Mandiri, which were up Rp 25, or 1.6 percent, at Rp 1,550 and Bank Rakyat Indonesia, which rose Rp 75, or 4.2 percent, to Rp 1,850.

Bellwether Telekomunikasi Indonesia, however, succumbed to profit taking, finishing down Rp 100, or 1.2 percent, at Rp 8,600 after it rose almost 7 percent in the previous two sessions.

Profit-taking also hit shares in Bank central Asia, which fell Rp 50, or 1.2 percent, to Rp 3,975.

Dealers expect the market Wednesday to trade flat to slightly lower on further profit taking.

Meanwhile, the Indonesian rupiah closed steady as local corporate demand for dollars offset the impact of fund flows into local capital markets, dealers said.

The dollar finished at Rp 8,625, little changed from its close Monday at Rp 8,620.

Foreign funds were selling dollars to buy government bonds at an auction Tuesday, traders said. The government issued Rp 3 trillion of bonds at a weighted average rate of 10.72 percent. The government received a total of Rp 9.93 trillion in bids for the bonds.

Traders said foreign investors also likely bought Indonesian stocks, which rose 0.8 percent to set a new record closing high of 818.159 points Tuesday.

But offshore debt repayments by local companies lent support to the dollar. Indonesian companies are saddled by around $60 billion in debts.

Dealers said players in the local currency market continued to ignore the recent controversial bankruptcy ruling against the local unit of the UK's Prudential Plc., as they believe the Supreme Court will eventually overturn the ruling.

Indonesia's Senior Economics Minister Dorodjatun Kuntjoro- jakti warned Tuesday that the case may further deter foreign investors from coming to Indonesia.

Dealers expect the dollar to remain trapped in a narrow range of Rp 8,615 to Rp 8,635 on Wednesday.