Rupiah ends at two-month high

Rupiah ends at two-month high

The rupiah closed at a two-month high on Friday as foreign
investors exchanged their dollars into the local unit to pay for
their purchases of domestic stocks bought earlier in the week,
dealers said.

The dollar closed at Rp 8,935, down from its close Thursday at
Rp 9,005. The last time the dollar closed around this level was
May 12.

"Some foreign names who usually take part in the (Indonesian)
stock market were the main dollar sellers today," said a dealer
with a foreign bank.

Shares gained 2.2 percent this week as foreign investors
turned bullish after Monday's peaceful presidential election.

Dealers, however, said that the dollar may not fall further
next week as the market is likely to focus on the second runoff
election in September.

Though the market has welcomed news that President Megawati
Soekarnoputri, and not Wiranto, is likely to take on Susilo
Bambang Yudhoyono in the next round, some have expressed concerns
over the prolonging political uncertainty.

The market wants Wiranto, who has been indicted for crimes
against humanity by a U.N.-sponsored tribunal, out of the
presidential race, dealers said.

Dealers said the dollar may continue to trade sideways in the
short term. They expect the U.S. currency to trade between Rp
8,900 and Rp 9,000 Monday.

Meanwhile, shares ended marginally higher as a late rebound in
cigarette and mining blue chips reversed earlier losses, dealers
said.

Overall sentiment, however, remained weak and cautious due to
political uncertainty ahead of the expected second round of
presidential polls, they said.

The Jakarta Stock Exchange's composite index ended up 1.398
points, or 0.2 percent, at 761.140.

Gainers led decliners 67 to 43, while 73 stocks were
unchanged. Volume was 1.1 billion shares valued at Rp 558
billion, compared with 1.7 billion shares valued at Rp 908
billion Thursday.

Indonesia's largest cigarette maker, Gudang Garam rose Rp 350,
or 2.5 percent, to Rp 14,550 on a rebound after falling 5 percent
Thursday.

Shares of tin miner Timah jumped Rp 125, or 6.4 percent, to Rp
2,075 on the government's plan to sell a 14 percent stake in the
company at a premium.

Also higher were shares of Indonesian Satellite Corp., which
ended up Rp 25, or 0.6 percent, to Rp 4,325 on bargain-hunting.

Indosat's rival Telekomunikasi Indonesia ended unchanged at Rp
7,650.