Shares end higher led by gains in Telkom

Shares end higher led by gains in Telkom

Dow Jones, Jakarta

Jakarta shares ended higher on Friday led by gains in bellwether Telekomunikasi Indonesia ahead of the company's plan to pay its dividend in the second week of July, dealers said.

They said investors, mostly foreigners, also bought shares in companies that earn U.S. dollars on expectations of an improved 2005 performance due to the weaker rupiah.

The Jakarta Stock Exchange's Composite Index ended up 1.5 percent, or 16.61 points, at 1138.99.

Gainers led decliners 62 to 58, with 60 stocks unchanged. Volume was 1.1 billion shares valued at Rp 976 billion, compared with 894 million shares valued at Rp 761 billion on Thursday.

"The main index should continue to rise next week on further foreign program buying," said a trader with a foreign securities firm.

Bellwether Telkom jumped 5 percent to Rp 5,250 ahead of the company's plan to pay a Rp 152 a share dividend July 15. Telkom's rival Indonesian Satellite (Indosat) gained 2.7 percent to Rp 5,650 on a rebound after recent falls.

Nickel miner International Nickel Indonesia gained 3.2 percent to Rp 14,600, on expectations of improved first-half earnings on the back of the stronger dollar. Most of Inco's output is exported.

Shares in automotive company Astra International were also higher, rising 2.4 percent to Rp 13,000 on expectations of an improved first-half due to an increase in car sales.

On the down side, Bank Negara Indonesia dropped 1.2 percent to Rp 1,670 on profit taking on expectations the bank's earnings will fall due to a decrease in its net interest margins.

Dealers said they expect shares to trade higher on Monday on further buying in Telkom and Inco.

On the currency market, the rupiah closed lower for the fifth straight session, but managed to get off its intraday low on suspected central bank intervention through state-owned banks, dealers said.

The dollar closed at Rp 9,770, up from Rp 9,758 on Thursday. The rupiah hit an intraday low of Rp 9,785.

Bank Indonesia Deputy Governor Aslim Tadjudin said on Friday the rupiah is currently undervalued against the U.S. dollar, attributing its weakness to global factors.

Aslim said rising U.S. interest rates and global oil prices are putting pressure on the local currency.

"We also see rising demand for the U.S. dollar by local companies," he said.

Aslim said the central bank will keep a close watch on the foreign-exchange market and will intervene to help the rupiah "if necessary."

Dealers said the statement from the central bank hasn't improved sentiment toward the rupiah much.

"There are fresh bids from local companies anytime the rupiah rises," said a trader with a state-owned bank.

They expect the dollar to trade between Rp 9,730 and Rp 9,800 on Monday, and to likely face profit-taking.