Rupiah ends lower on dollar demand from firms

Rupiah ends lower on dollar demand from firms

Dow Jones, Jakarta

The rupiah ended lower on Wednesday as local companies
continued buying dollars to pay maturing offshore obligations at
the end of the month, dealers said.

The dollar closed at Rp 9,010, up from its close on Tuesday at
Rp 8,980.

The central bank was said to have sold the dollar to slow its
rise, but the authorities failed to keep the U.S. unit below the
psychologically-important level of Rp 9,000.

Dealers expect demand from local companies will likely keep
the dollar above Rp 9,000 until the end of the month. Local firms
are saddled with over US$60 billion in offshore borrowing and
payment of such maturing debt usually weighs on the rupiah.

Dealers added that most players remain cautious in building
fresh positions due to lingering political uncertainties in the
run-up to the second round of presidential elections on Sept.20.

Incumbent President Megawati Soekarnoputri is widely expected
to face market-favorite Susilo Bambang Yudhoyono in the September
poll after the first-round election earlier this month failed to
produce an outright winner.

Dealers expect the dollar to trade between Rp 8,990 and Rp
9,025 on Thursday.

Meanwhile, shares ended marginally higher Wednesday on a
rebound, with gains across Asian markets providing support,
dealers said.

"Buying, however, wasn't that aggressive," said a trader with
a local securities firm. She added that many investors stayed on
the sidelines given the prolonged political uncertainty ahead of
September's second round of presidential polls.

The Jakarta Stock Exchange's composite index ended up 4.572
points, or 0.6 percent, at 761.239.

Gainers led decliners 55 to 35, while 86 stocks were
unchanged. Volume was 1.6 billion shares valued at Rp 969
billion.

Telecommunication and bank blue chips were among the gainers.

Index heavyweight Telekomunikasi Indonesia rose Rp 150, or 2
percent, to Rp 7,850 and Indonesian Satellite Corp. added Rp 100,
or 2.4 percent, at Rp 4,275.

Dealers said buying in telecom shares was on expectations of
higher first half earnings. The two telecoms companies are
expected to announce their first half results early next month.

Also higher were shares of Bank Mandiri, Indonesia's largest
lender, up Rp 25, or 2.1 percent, at Rp 1,250, and Bank Danamon,
up Rp 75, or 2.4 percent, at Rp 3,225.

Shares of cigarette maker Hanjaya Mandala Sampoerna ended down
Rp 100, or 1.7 percent, at Rp 5,700 and its rival Gudang Garam
fell Rp 50, or 0.4 percent, to Rp 14,000.

Dealers said they expect the market on Thursday to trade
slightly higher on a further rebound.