Shares end down, led by profit-taking in Telkom

Shares end down, led by profit-taking in Telkom

Dow Jones, Jakarta

Indonesian shares ended lower on Monday led by profit-taking in
Telekomunikasi Indonesia and many bank blue chips after the main
index hit a record high in the previous session, dealers said.

They said overall sentiment was weak, hit by renewed fears
that the central bank will raise interest rates to combat
inflation stemming from higher fuel prices.

The government has said it plan to increase fuel prices later
this year to reduce the 2005 budget deficit.

"These negative factors are a good excuse for investors to
take profit," said a trader with a local securities firm.

The Jakarta Stock Exchange Composite Index ended down 17.05
points, or 1.7 percent, at 1,015.478. The main index had
previously risen 3.2 percent since the start of the year.

Decliners led gainers 109 to 29, with 55 stocks unchanged.

Volume was 2.17 billion shares valued at Rp 1.8 trillion,
compared with 2.6 billion shares valued at Rp 2.2 trillion on
Friday.

Telekomunikasi Indonesia (Telkom) fell 3.4 percent to Rp 4,950
on profit-taking after rising 6.2 percent last week.

Telkom's rival Indonesian Satellite (Indosat) dropped 3.9
percent to Rp 6,150, also on profit-taking.

Bank Mandiri, the nation's largest lender, fell 3.8 percent to
Rp 1,925, Bank Danamon lost 1.7 percent to Rp 4,250, and Bank
Central Asia ended 4.2 percent lower at Rp 2,825.

Dealers also attributed selling in bank shares to expectations
that they will be the hardest hit by the tsunami disaster among
listed companies.

The central bank has predicted that at least half of the Rp 4
trillion in total bank loans in Aceh are irrecoverable.

Shares in cigarette blue chips, however, bucked the trend on
expectations of higher 2004 earnings.

Cigarette maker Gudang Garam gained 1.4 percent to Rp 14,150,
and rival Hanjaya Mandala Sampoerna added 0.7 percent to Rp
7,000. The cigarette companies are expected to announce their
earnings early next month.

Dealers said they expect the market on Tuesday to trade lower
on further profit-taking in telecommunication and bank blue
chips.

Meanwhile, the rupiah closed lower on dollar demand from local
importers, dealers said.

The rupiah closed at 9,295 per dollar, weakened from its close
on Friday at 9,285.

"Dollar demand from local companies was quite healthy today,"
a dealer said.

Still, the dollar failed to rise further due to humanitarian
fund inflows into the country related to the recent tsunami
disaster, dealers said.

The rupiah was also supported by capital inflows into the
stock market, as foreign investors settled their purchases of
Indonesian stocks last week.

"The capital inflows prevented the rupiah from losing much
further ground," another dealer with a foreign bank said.

Dealers expect the rupiah to trade between 9,285 and 9,325 per
dollar on Tuesday.