Shares end down amid uncertainty

Shares end down amid uncertainty

Dow Jones, Jakarta

Shares closed marginally lower on Monday as investors, mostly foreigners, continued to offload their equity portfolio amid political uncertainty ahead of the presidential runoff in September, dealers said.

Gains in many regional markets failed to improve buying sentiment, they said.

"The market is consolidating ahead of the September's event," said a trader with Paramitra Securities.

The Jakarta Stock Exchange Composite index was down 1.101 points, or 0.2 percent, at 749.371.

Decliners led gainers 65 to 35, with 89 stocks unchanged. Volume was 495 million shares valued at Rp 447 billion.

Consumer goods producer Unilever Indonesia led the decliners, falling Rp 75, or 2.1 percent, to Rp 3,550 on talks that the company would issue rights shares.

Bellwether Telekomunikasi Indonesia ended down Rp 50, or 0.7 percent, at Rp 7,650, and Indonesian Satellite Corp. fell Rp 50, or 1.2 percent, to Rp 4,075 on profit taking.

Dealers said ongoing worries that the central bank may raise interest rate kept sentiment in select bank blue chips weak. Bank Mandiri dropped Rp 25, or 2 percent, to Rp 1,200, and Bank Rakyat shed Rp 25, or 1.5 percent, to Rp 1,650.

Bank Negara Indonesia, however, jumped Rp 100, or 9.3 percent, to Rp 1,175 on hopes that the government will proceed with the sale of its stake in the bank by the fourth quarter of this year.

Cement maker Semen Gresik rose Rp 250, or 2.6 percent, to Rp 9,750 on bargain hunting and expectations that the company will complete its 2002 and 2003 financial audit by October.

Dealers said they expect the market to trade lower Tuesday on further selling in blue chips.

Meanwhile, the rupiah ended lower in quiet trading Monday as local companies bought the dollar to pay offshore debts maturing at the end of the month, dealers said.

The dollar finished at Rp 9,265, up from its close at 9,240 Friday.

Local companies are saddled by offshore borrowings, which are estimated at US$60 billion. Payment of maturing debts frequently dogs the local unit.

Dealers said that the dollar's slide in the previous two sessions had provided good levels for local companies to accumulate the unit, dealers said.

The dollar fell to an intraday low of Rp 9,210 Friday as foreigners bought the rupiah to take part in a government bond auction Tuesday.

The government hopes to raise Rp 2 trillion to help narrow the state budget deficit.

"Dollar offer from foreigners evaporated Monday," one dealer said.

Dealers expect the dollar to test higher Tuesday as more local companies are expected to buy the currency.

Dealers expect the dollar to trade between 9,250 and 9,300 Tuesday.