Shares end higher as bank blue chips rebound
Shares end higher as bank blue chips rebound
Dow Jones, Jakarta
Indonesian shares ended marginally higher on Friday led by a
rebound in select bank blue chips after falls in the previous
four sessions due to the weaker rupiah and high interest rate,
dealers said.
They said gains in several regional markets improved sentiment
on the local bourse but lingering worries that the central bank
may continue to increase the key interest rate to defend the
rupiah prevented investors from taking up strong buying
positions.
The Jakarta Stock Exchange's Composite Index ended up 2.154
points, or 0.2 percent, at 1110.557, up from an earlier low of
1103.206.
"Some bargain hunting by foreign funds managed to lift the
main index from its low," said a trader with a local securities
firm. She added that overall sentiment was cautious, with many
staying on the sidelines given an absence of fresh leads.
Gainers led decliners 61 to 48, with 63 stocks unchanged.
Volume was 975 million shares valued at Rp 554 billion, compared
with 1.4 billion shares valued at Rp 1.2 trillion on Thursday.
Bank Danamon led gainers, rising 2 percent to Rp 5,000, Bank
Rakyat Indonesia rose 1.7 percent to Rp 2,925 and Bank Central
Asia ended up 1.4 percent at Rp 3,525. The banks rebounded after
falls in the previous four sessions on worries their net interest
margins will be shaved due to the high interest rate.
Benchmark one-month Bank Indonesia notes rose on Wednesday to
8.44 percent from 8.25 percent.
Oil producer Medco Energi gained 1.3 percent to Rp 3,775 on
expectations of improved first-half earnings due to high oil
prices.
Dealers said shares in bellwether Telekomunikasi Indonesia
continued to succumb to selling pressure on lingering worries
that the company may face a trading suspension on the New York
bourse if it fails to file its 2004 earnings to the U.S.
Securities and Exchange Commission, or SEC, by July 15.
Dealers said they expect the market to trade slightly higher
on Monday led by a further rebound in banking stocks.
The rupiah ended up on Friday as suspected central bank
intervention helped to bolster the currency against the dollar,
dealers said.
The dollar closed at Rp 9,790, slightly down from Rp 9,795 on
Thursday. The dollar hit a high of Rp 9,833 in intraday trade.
"The market was a little bit off today as Bank Indonesia kept
intervening at the Rp 9,830 mark," a dealer from a foreign bank
said.
"I think there was also a trend of players who'd overbought
dollars selling back into the market."
Friday's closing rupiah result also reflects the impact of the
government's move late Tuesday to directly supply state oil and
gas firm PT Pertamina with dollars through the central bank.
Dealers have attributed Pertamina's voracious dollar appetite
to fund oil imports amid record-high global oil prices for a
seven-day slide in the rupiah's value that didn't stop until
Wednesday. Dealers and economists say Pertamina normally accounts
for up to 25 percent of dollar demand in the local currency
market.
Central bank and senior government officials have said that
the rupiah will meet an official projected average value of Rp
9,300 against the dollar in 2005. But dealers say that a market
tracking a strong dollar against regional currencies and
continuing domestic corporate demand for dollars will weigh on
the rupiah.
The dollar will likely trade between Rp 9,770 and Rp 9,800 on
Monday, dealers said.