Shares end at record high; Rupiah rallies
Shares end at record high; Rupiah rallies
Dow Jones, Jakarta
Indonesia's main stock index set a fresh record-high closing
level on Tuesday, driven by gains in cement and heavy equipment
blue chips.
The Jakarta Stock Exchange Composite Index ended up 17.666
points, or 1.8 percent, at 1018.54 points.
Cement companies led the gainers on expectations that the
companies' fortunes will improve this year due to reconstruction
efforts in the areas devastated by last week's earthquake and
tsunami.
The market also welcomed President Susilo Bambang Yudhoyono's
statement that the impact of last week's disasters won't likely
hurt the country's economic growth this year, traders said.
The government is predicting an economic expansion of 5.5
percent in 2005, outpacing a projected 4.8 percent gross domestic
product growth for 2004.
Dealers also said the stronger rupiah against the U.S. dollar
and early program buying by many foreign institutional funds
helped boost buying.
"We have a lot of positive factors that spurred investors to
further snap up Indonesian shares," said a trader with Paramitra
Securities.
Gainers led decliners 95 to 39, with 63 stocks unchanged.
Volume was 1.77 billion shares valued at Rp 1.93 trillion,
compared with 504 million shares valued at Rp 598 billion on
Monday.
Cement maker Semen Gresik rose 3.6 percent to Rp 20,100, while
Indocement Tunggal Prakarsa gained 1.5 percent to Rp 3,350. Semen
Cibinong jumped 9.8 percent to Rp 670.
Heavy equipment company United Tractors increased 9.7 percent
to Rp 2,550 while rival Komatsu Indonesia rose 5.4 percent to Rp
3,425.
Shares of bellwether Telekomunikasi Indonesia gained 0.5
percent to Rp 4,950 on a rebound and after its American
Depositary Receipts rose 1.5 percent to $21.34 on Monday.
Dealers expect the market Wednesday to trade higher on follow-
through buying in infrastructure-related companies.
In the currency market, the rupiah ended higher after news
reports highlighted the possibility of debt relief from
international lenders and pledges of aid to help the country
rebuild its tsunami-affected areas, dealers said.
The rupiah closed at Rp 9,280 per dollar, down from its close
on Monday at Rp 9,305.
Some countries are reported to have been seeking a debt
moratorium for tsunami-hit countries, including Indonesia, to
help them cope with the impact of last month's disaster.
The local unit also benefited from the bullish sentiment on
local stocks.
Still, some dealers said that the rupiah remains vulnerable,
with the market watching how the government will handle its plan
to reduce fuel subsidies in the state budget.
The government has said that it would raise domestic fuel
prices some time this year to cut subsidies, but such a move
could trigger widespread public protest.
"It's a catch-22 situation for the government, and the market
is keen to see how successful the government will be in
overcoming it," a dealer with a foreign bank said.
Dealers expect the dollar to trade between Rp 9,260 and Rp
9,310 on Wednesday.