Rupiah ends up on profit-taking

Rupiah ends up on profit-taking

Dow Jones, Jakarta

The rupiah ended higher on Thursday on suspected intervention by the central bank, Bank Indonesia, and continued profit-taking against the dollar's recent rise, dealers said.

The dollar closed at Rp 9,485, down from its close on Wednesday at Rp 9,525.

State banks, suspected to be acting on behalf of the central bank, sold the dollar when trading opened, dealers said.

"The suspected Bank Indonesia's dollar unloading triggered further profit-taking against the dollar, which was also prompted by the dollar's correction against most other Asian currencies," a dealer with a local bank said.

Month-end dollar demand from local companies slowed the dollar's slide, dealers said. Local companies usually step up their dollar purchases during month-ends to pay for maturing offshore debt or to finance imports.

Dealers said that the greenback may test lower levels on Friday, but much also depends on the dollar's movement against other major currencies.

They expect the unit to trade between Rp 9,450 and Rp 9,500.

Meanwhile, Jakarta shares ended higher on a rebound after falls in the previous five sessions, with gains across Asian markets providing support, dealers said.

"The market recovered slightly from its recent sharp losses," said a trader with a foreign securities firm. He added that bargain hunters bought back shares in plantation and infrastructure-related companies on expectations of improved 2005 performance.

Dealers said lingering worries that the central bank will soon raise interest rates to defend the rupiah and combat rising inflation prevented investors from taking up strong buying positions.

The Jakarta Stock Exchange Composite Index ended up 15.04 points, or 1.4 percent, at 1080.17.

Gainers led decliners 106 to 40, with 63 stocks unchanged.

Volume was 2.3 billion shares valued at Rp 2.1 trillion, compared with 2.86 billion shares valued at Rp 2.7 trillion on Wednesday.

Heavy equipment company United Tractors jumped 11 percent to Rp 2,875 on a rebound after falling 22 percent in the previous five sessions.

Dealers also attributed gains in Tractors to expectations that its performance will improve this year due to rising heavy equipment demand for reconstruction projects in earthquake devastated areas in Indonesia.

Crude palm oil producer Astra Agro Lestari rose 8.1 percent to Rp 4,000 on expectations of solid first-quarter earnings due to higher commodity prices.

Also higher on a rebound were shares in bellwether Telekomunikasi Indonesia (Telkom), which gained 0.6 percent to Rp 4,475 and rival Indonesian Satellite (Indosat), which added 2.6 percent to Rp 4,875.

Dealers expect the market to trade higher on Friday on further bargain hunting.