Shares end at record high ahead of new cabinet
Shares end at record high ahead of new cabinet
Dow Jones, Jakarta
Indonesian shares ended at a record high on Wednesday as foreign investors bought back local stocks ahead of the announcement of a new Cabinet next week, dealers said.
President-elect Susilo Bambang Yudhoyono is expected to announce his Cabinet lineup Oct. 20, when he will be inaugurated as Indonesia's new head of state.
Dealers said the market expects the handover to the new government is expected to further boost investor sentiment in Indonesia.
The Jakarta Stock Exchange Composite index rose 13.98 points, or 1.7 percent, to 863.171. This is the record closing high following the previous 861.32 high reached on Oct. 5.
Gainers led decliners 142 to 18, while 69 stocks ended unchanged.
Volume stood at 1.9 billion shares valued at Rp 1.33 trillion.
Dealers said foreign investors bought Indonesian shares because they are still relatively cheaper than shares in other regional markets.
"Indonesian share prices are relatively still lower than those, for example, in Thailand," said a dealer with a foreign securities company. "I'm optimistic the index will rise to 880 points in the near future."
Banking and tobacco stocks are among the gainers Wednesday.
Indonesia's largest lender Bank Mandiri rose 6.8 percent to Rp 1,575 on expectations of a robust growth in its net profit this year. Chief Executive Edwin Neloe said on Wednesday the bank has revised its 2004 net profit forecast to Rp 4.8 trillion from Rp 4 trillion previously as its nine-month profit has already exceeded Rp 4 trillion.
Bank Central Asia edged up 1.1 percent to Rp 2,250.
Cigarette maker Hanjaya Mandala Sampoerna gained 5.3 percent at Rp 5,950, whereas its larger rival Gudang Garam ended up 0.4 percent at Rp 12,800.
Indonesia's largest telephone company Telekomunikasi Indonesia rose 1.8 percent to Rp 4,350.
Dealers said they expect share prices to keep rising on Thursday, but profit taking may limit further gains.
Meanwhile on the currency market, the rupiah weakened slightly on Wednesday on dollar demand from local importers, dealers said.
The rupiah closed at 9,145 per dollar, down from Rp 9,135 on Tuesday.
Dealers said local importers need more dollars to pay rising food imports ahead of the Muslim holy month, which starts later this week and the Idul Fitri holiday next month.
"Food imports usually rise ahead of Idul Fitri, and consequently demand for the dollar also increases," a dealer said.
The dollar's rise, however, was limited by profit taking ahead of the naming of the country's new government next week, dealers said. They added that the market expects President-elect Susilo Bambang Yudhoyono to form a market-friendly cabinet.
Vice president-elect Jusuf Kalla said over the weekend that 60 percent of the ministers will be specialized professionals and 40 percent career politicians.
Dealers expect the dollar to trade between Rp 9,000 and Rp 9,150 on Thursday.