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.