Share end up on muted protests

Share end up on muted protests

Dow Jones, Jakarta

Indonesian shares ended higher on Friday on a combination of investor relief that protests over a pending fuel price hike were muted, and routine end-quarter window dressing by fund managers, dealers said.

The Jakarta Stock Exchange's Composite Index ended up 2.95 percent, or 30.9 points, at 1079.275.

Gainers led decliners 137 to 17 with 43 stocks unchanged. Volume rose to 4.2 billion shares valued at Rp 5.6 trillion compared to 963 million shares valued at Rp 915 billion on Thursday.

Shares rose across the board as threatened massive street protests over a fuel price hike on Saturday failed to mobilize significant numbers of demonstrators, a dealer said.

"The market accepted that demonstrations weren't going to be too disruptive and that boosted sentiment," the dealer said.

Scattered protests occurred in different points of Jakarta on Thursday, but were a fraction of the more than 10,000 people that organizers had originally said.

Fuel price increases will lessen the burden of fuel price subsidies which cost the government $7.4 billion, or 3 percent of gross domestic product, in 2004.

Cyclical window dressing, in which fund managers buy up shares of selected companies in their portfolios to help boost the net asset value of that portfolio, also boosted the index.

"The other reason for the market's rise is the fact that it's the end of the quarter and we saw fund manager's window dressing share purchases," a dealer said.

Blue chip stocks across all sectors ended up on Friday.

Automaker Astra International ended up 7.14 percent at Rp 9,750, while copper and gold mining giant Aneka Tambang added 5.83 percent to Rp 2,725.

Bank Mandiri climbed 4.32 percent to Rp 1,450 and Bank Danamon Indonesia closed up 2.55 percent at Rp 4,025.

Mobile phone operator Excelcomindo Pratama added 5.43 percent to Rp 2,425, a deceleration from the 15 percent rise it saw on in its Jakarta bourse debut on Thursday.

Dealers say the size of the pending fuel price increase and public reaction to it will determine how the market will move next week, but continuing positive sentiment may help the Jakarta Stock Exchange Composite Index to test the 1100 level in early week trade.

Elsewhere, the rupiah ended nearly flat on Friday as month-end dollar demand from local companies erased the rupiah's earlier gains, dealers said.

The dollar closed at Rp 10,290, little changed from its close on Thursday at Rp 10,295.

The greenback fell to an intraday low of Rp 10,190 earlier in the day due to capital inflows into the local stock market.

Foreign investors bought back Indonesian shares on Thursday and Friday as street protests against the government's plan to hike fuel prices starting this weekend remained generally peaceful.

Dealers said interbank market players also unwound their long positions on the dollar, dragging it lower early Friday.

But local companies who need dollars to pay maturing offshore obligations entered the market in late afternoon trade, pushing the U.S. unit back almost to its Thursday closing level.

Dealers said the market will closely watch public reaction to the fuel price hike.

"It is hard to predict the market next week, as it will largely depend on public reaction to the new fuel prices," a dealer with a foreign bank said.

Analysts expect street protests to continue next week, but to lose steam from Wednesday when the Ramadhan Muslim fasting month begins.