RI shares end lower on selling in blue chips

RI shares end lower on selling in blue chips

Dow Jones, Jakarta

Indonesian shares ended lower for the fifth consecutive session on Wednesday as investors, mostly foreigners, continued to offload many blue chips ahead of the presidential runoff in September, dealers said.

"Foreign investors were dominant sellers," said a trader with a local securities firm. The losses could reflect investors' concerns over the nation's security ahead of the September event, she said.

The Jakarta Stock Exchange Composite index ended down 7.150 points, or 1 percent, at 731.716, the lowest closing level since July 4.

Decliners led gainers 59 to 31, with 84 stocks unchanged.

Volume was 504 million shares valued at Rp 383 billion (US$41 million).

Dealers said the weak rupiah also added to negative sentiment.

Consumer goods producer Unilever Indonesia led decliners, down Rp 100, or 2.9 percent, at Rp 3,300 due to a further price correction.

Index heavyweight Telekomunikasi Indonesia fell Rp 100, or 1.4 percent, to Rp 7,300 on further profit taking.

Bank Rakyat Indonesia fell Rp 50, or 3 percent, to Rp 1,600 and Bank Central Asia lost Rp 25, or 1.4 percent, to Rp 1,800 on worries the central bank might raise interest rates to defend the rupiah.

"If selling continues, the main index could test the support level of 720 by on Friday," said an analyst with Kuo Capital Securities.

Meanwhile, the rupiah closed slightly lower on Wednesday on dollar demand from local companies to pay offshore debts maturing at the end of the month.

Dealers said profit-taking on dollar positions by offshore players helped limit the rupiah's losses.

The dollar finished at Rp 9,280, up a tad from its close of Rp 9,275 on Tuesday.

Local companies are saddled with offshore borrowings estimated at $60 billion. Payment of maturing debts frequently dogs the local currency.

But dollar bids from local companies were not as robust as market players had expected and sparked offshore participants to take profit after the dollar touched an intraday high of Rp 9,290, dealers said.

Dealers expect demand for the greenback from local companies to persist until the end of the month.

They added that lingering political uncertainties in the run- up to the presidential runoff election Sept. 20 also will keep underlying sentiment bullish on the dollar.