Rupiah ends lower on Astra, Telkom sell-off

Rupiah ends lower on Astra, Telkom sell-off

Dow Jones/Jakarta

The Indonesian rupiah closed down on Monday as corporate
dollar demand outweighed offshore investor rupiah purchases,
dealers said.

The dollar closed at Rp 9,820 compared with Rp 9,738 on
Friday. The rupiah hit an intraday low on Monday of Rp 9,755.

"All in all we see interest in U.S. dollars from different
types of domestic companies...still trying to buy more dollars
for debt obligations," a dealer at a foreign bank said. "This
(buying) seems geared to real demand rather than new supply
purposes."

Those dollar purchases overwhelmed the influence of rupiah-
buying by offshore investors seeking shares in Indonesia's
surging stock market. The Jakarta index is the region's best
performer this year and is attracting increasing interest from
overseas.

A dealer said the rupiah lost traction, particularly against
massive dumping of the currency by a domestic corporation seeking
to convert US$300 million in rupiah from recent share sales into
the U.S. dollars.

"All proceeds from the sales are in rupiah and the company is
gradually buying dollars in tranches to repay dollar debts," the
dealer said. "I think that puts a lot of pressure on the rupiah."

Dealers expect the rupiah to trade between Rp 9,750 and Rp
9,825 on Tuesday.

Indonesian shares ended lower on Monday led by further selling
in automotive company Astra International and bellwether
Telekomunikasi Indonesia, dealers said.

"Falls in Astra and Telkom hurt overall sentiment, spurring
further profit taking after the main index hit a record high last
week," said a trader with a foreign securities firm.

Dealers said growing worries over the high interest rate and
the volatility of the rupiah also added to negative sentiment.

The Jakarta Stock Exchange's Composite Index fell 0.8 percent,
or 15.504 points, to 1158.586.

Decliners led gainers 89 to 23, with 83 stocks unchanged.
Volume rose to 1.4 billion shares valued at Rp 1.25 trillion,
compared with 1.23 billion shares valued at Rp 1.1 trillion on
Friday.

Astra International lost 4.5 percent to Rp 11,800 on
expectations of lower 2005 sales as the high interest rate could
prevent people from buying cars through bank loans.

Analysts expect the benchmark one-month interest rate of Bank
Indonesia notes to hit 9.5 percent by the end of the year,
compared with 8.5 percent at present, due to rising inflation.

Bellwether Telekomunikasi Indonesia lost 2.7 percent to
Rp 5,350 on worries that the company may review its listing on
the New York Stock Exchange due to the high cost.

Traders also attributed selling in Telkom to worries that
Telkom will face stiffer competition from the entrance of foreign
telecommunication companies. Hong Kong's Hutchison
Telecommunications International Ltd. has said that it plans to
acquire a stake in an Indonesian telecommunications company later
this year.

Profit taking also hit cement maker Semen Gresik, which fell
4.3 percent to Rp 18,000 on expectations of lower 2005 sales as
the weak rupiah is seen reducing consumer spending.

Dealers said they expect Indonesian shares to rebound on
Tuesday on bargain hunting after the main index fell in the
previous three sessions.