Shares end at high on foreign buying

Dow Jones, Jakarta

Indonesian shares closed at another record high on Thursday as foreign investors continued to buy blue chips, like Indonesian Satellite (Indosat) and Bank Central Asia (BCA), that are expected to book higher full-year earnings.

"Foreign investors remained dominant buyers," said an analyst with Kuo Capital Securities.

He said underlying sentiment stayed positive after the World Bank raised its forecast for Indonesia's gross domestic product growth.

Dealers said profit-taking by local retail investors, however, capped the main index's further rise.

The Jakarta Stock Exchange Composite ended up 6.47 points, or 0.7 percent, to hit an all-time closing high of 925.19.

Gainers led decliners 80 to 47, while 75 stocks were unchanged.

Volume was 4.7 billion shares worth Rp 3.4 trillion.

Indosat led gainers on expectations of higher full-year earnings due to more contributions from its cellular services. It gained 2.8 percent to Rp 5,550.

Bank Central Asia ended up 3.8 percent at Rp 2,750, as an increase in interest income is expected to boost the bank's full- year earnings.

Dealers said investors continued to buy shares in tobacco companies on expectations of the firms' improved performance next year because of stronger consumer purchasing power.

Cigarette maker Gudang Garam climbed 1.9 percent to Rp 13,150 and rival Hanjaya Mandala Sampoerna advanced 2.3 percent to Rp 6,700.

Profit-taking, however, hit shares in bellwether Telekomunikasi Indonesia (Telkom), which closed down 1.1 percent at Rp 4,700 and Bank Mandiri, which fell 1.5 percent to Rp 1,675.

Dealers said they expect the market to trade higher on Friday on further buying in blue chips.

Meanwhile, in the currency market, the rupiah ended lower on Thursday on the dollar's rise against its major rivals following better-than-anticipated U.S. trade data and expectations for another U.S. interest rate hike later this year, dealers said.

The dollar ended at Rp 9,070, up from its close on Wednesday at Rp 9,050.

"The rupiah was not spared from the impact of the dollar's rise against other global currencies," a dealer said.

The U.S. currency rose after the Federal Reserve on Wednesday raised interest rates for the fourth time this year, hiking its short-term interest-rate target to 2.00 percent from 1.75 percent. The Fed continued to strike an optimistic note on the economy and inflation, so leaving the door open for another rate hike in December.

Good news for the dollar, the U.S. Commerce Department reported on Wednesday that the U.S. trade deficit narrowed to $51.56 billion, beating the downwardly revised $53.55 billion August shortfall and the $53.50 billion consensus.

Dealers here said a delay in settlement for spot transactions done on Thursday and on Friday also encouraged players to buy more dollars against the rupiah on Thursday.

Settlement usually takes place two days after a transaction is done. But due to the upcoming holidays, settlement for on Thursday and on Friday will now take place after next week.

The local currency market will be closed for the whole of next week due to the Muslim Idul Fitri holiday.

Dealers expect the dollar to trade between Rp 9,050 and Rp 9,100 on Friday.