Shares end at record high on rise in energy, bank chips

Shares end at record high on rise in energy, bank chips

Dow Jones, Jakarta

Indonesian shares ended slightly higher on Wednesday as gains
in gas and oil producer Medco Energi and bank blue chips drove
the main index to a fresh record high, dealers said.

The Jakarta Stock Exchange's Composite Index added 0.2
percent, or 2.876 points, to 1192.203.

News that Indonesia's economy expanded by 6.3 percent in the
first half of this year, higher than the government's target of
6 percent for the rest of 2005, improved overall sentiment, but
sporadic profit-taking by local funds prevented the main index
from testing the important level of 1,200, dealers said.

"The gains of main index looked limited, which could reflect
that price correction may continue tomorrow," said an analyst
with Kuo Capital Securities.

Gainers beat decliners 68 to 50, with 79 stocks unchanged.
Volume rose to 1.5 billion shares valued at Rp 1.4 trillion,
compared with 1.35 billion shares valued at Rp 1.12 trillion on
Tuesday.

Leading gainers, gas and oil producer Medco Energi jumped 8.1
percent to Rp 3,350 on a rebound after falling 19 percent earlier
this week following the company's announcement that it will sell
899 million shares on the Luxembourg bourse at a discount.

Dealers also attributed Medco's advance to news that its
first-half net profit rose 79 percent on year due to an increase
in oil prices.

Gas producer Gas Negara rose 3.8 percent to Rp 3,450 on
expectations that the government will sell a stake in the company
at premium later this year.

Investors also bought shares of select banks on expectations
that the government will proceed with its plan to sell part of
its stakes in the banks later this year at premium, dealers said.
The government is expected to use the proceeds to cover the 2005
budget deficit.

Bank Mandiri, the nation's largest lender by assets, gained
1.2 percent to Rp 1,650 and Bank Central Asia added 1.3 percent
to Rp 3,775.

On the down side, Astra International, the nation's largest
automotive company, fell on renewed worries that high interest
rates could hurt its sales this year by preventing people from
buying cars with bank loans. Astra lost 2.7 percent to Rp 12,850.

The central bank on Wednesday raised its benchmark one-month
note interest rate to 8.5 percent from 8.49 percent previously.

Dealers said they expect Indonesian shares to trade lower on
Thursday on profit-taking.

The Indonesian rupiah closed lower on Wednesday on dollar
demand from local importers, dealers said.

The dollar closed at Rp 9,765 compared with its close on
Tuesday at Rp 9,745.

The dollar was steady during much of the day's trading, but
rose in late afternoon as importers entered the market, dealers
said.

Dealers suspected that state-owned oil and gas company
Pertamina, in charge of importing petroleum products for the
country, was the main dollar-buyer. Officials at Pertamina
couldn't be contacted to confirm dealers' comments.

Pertamina officials have said earlier that the company buys
its dollars directly from the central bank to fund imports, but
many dealers believe the company still buys the U.S. currency in
the market via state banks.

Earlier Wednesday, Economics Minister Aburizal Bakrie told
reporters that the government has sought a US$1.5-billion loan
from China to finance Pertamina's imports. The loan will help
ease the pressure on the rupiah, Bakrie said.

Dealers said that the dollar may slide toward Rp 9,750 on
Thursday on expected capital inflows linked to the government's
10.5 percent stake sale in Bank Danamon, which is expected to
fetch around $270 million.