Shares end higher as Telkom up 7%

Shares end higher as Telkom up 7%

Indonesian shares ended higher on Wednesday as further buying in Telekomunikasi Indonesia (Telkom) drove the main index to hit a fresh 43-month closing high, dealers said.

The recent strength of the rupiah against the dollar following the Moody's Investors Service upgrade of Indonesia's foreign currency ratings to B2 has improved sentiment.

The dollar is at Rp 8,383, compared with Rp 8,410 at Tuesday's close.

Dealers said a fall in key short-term bond yields prompted investors to shift their money from bank deposits to equities where they believe profits will be higher.

Indonesia's central bank on Wednesday allowed average yields on its benchmark one-month Sertifikat Bank Indonesia, or SBI, notes to fall to an all-time low of 8.59 percent at the regular weekly auction, from 8.66 percent a week earlier.

The Jakarta Composite Index ended up 1.4 percent, or 8.387 points, at 606.04.

Gainers led decliners 70 to 66, with 85 stocks unchanged.

Volume was 819 million shares traded, worth Rp 567 billion.

Telkom jumped 7 percent, or Rp 400, to Rp 6,100.

Dealers attribute the buying in Telkom to expectations of higher revenue this year due to greater contributions from its cellular unit Telkomsel and fixed-line services.

"Gains in Telkom encouraged investors to buy other select blue chips," said a trader with a local brokerage firm.

Bank Mandiri, the nation's largest bank in terms of assets, ended up 2.9 percent, or Rp 25, to Rp 875.

Retailer Ramayana Lestari rose 2.5 percent, or Rp 100, to Rp 4,175, and cigarette maker Gudang Garam gained 0.4 percent, or Rp 50, to Rp 11,300. But, Garam's rival Hanjaya Mandala Sampoerna succumbed to profit-taking, falling 1.1 percent, or Rp 50, to Rp 4,475.

Dealers expect the market to trade higher on Thursday on further buying in telecommunication blue chips. -- Dow Jones