Shares end down as Astra falls amid high rate worries
Shares end down as Astra falls amid high rate worries
Dow Jones, Jakarta
Indonesian shares ended lower on Friday led by further selling in automotive company Astra International amid worries that the high interest rate could hurt the company's sales, dealers said.
Dealers said overall sentiment remained weak, weighed down by falls in most Asian markets.
"Profit taking occurred for the second consecutive session after the main index failed to test the important level of 1,200 on Wednesday," said a trader with a local securities firm.
The Jakarta Stock Exchange's Composite Index fell 1 percent, or 11.24 points, to 1,174.09.
Decliners led gainers 59 to 49, with 67 stocks unchanged. Volume fell to 1.23 billion shares valued at Rp 1.1 trillion, compared with 1.98 billion shares valued at Rp 3.6 trillion on Thursday.
Astra International lost 2 percent to Rp 12,350 on expectations that the high interest rate could prevent people from buying cars through bank loans.
Analysts expect the benchmark one-month interest rate of Bank Indonesia notes to hit 9.5 percent by the end of the year, compared with 8.5 percent at present, due to rising inflation.
Bellwether Telekomunikasi Indonesia succumbed to selling pressure again amid worries that it will face stiffer competition from the entrance of foreign telecommunication companies. Hong Kong's Hutchinson Telecommunications International Ltd. has said that it plans to acquire a stake in an Indonesian telecommunications company later this year.
Also lower on profit taking were shares in Bank Rakyat Indonesia, which fell 4.8 percent to Rp 2,975 after sharp gains early this week following its solid first-half performance.
On the upside, coal producer Tambang Batubara Bukit jumped 5 percent to Rp 1,690 on expectations of improved 2005 earnings due to higher product prices.
Dealers said they expect Indonesian shares to trade slightly higher on Monday on a rebound after falling in the previous two sessions.
Meanwhile, the rupiah closed steady as dollar purchases offset capital inflows, dealers said.
The dollar closed at Rp 9,738, compared with Rp 9,740 on Thursday. It fell to an intraday low of Rp 9,720 on capital inflows linked to Wednesday's sale of Bank Danamon stake.
The government raised $270 million by selling a 10.5 percent stake in the nation's fifth largest lender by assets.
But a unit of a Singaporean bank in Jakarta actively bought dollars, which dealers suspected was because of conversion of dividend payments made in the rupiah.
Singapore telecommunications companies are large shareholders of key Indonesian phone operators.
Dealers said that market participants also covered short positions in the dollar as the greenback recovered against most major Asian currencies such as the yen and the won.
"People apparently don't want to spend the weekend while still having open-dollar positions as it staged a recovery against major rivals," a dealer with a foreign bank said.
Dealers expect the dollar to trade between Rp 9,720 and Rp 9,750 on Monday.