Shares end higher on gains by Gudang Garam, Telkom
Shares end higher on gains by Gudang Garam, Telkom
Dow Jones, Jakarta
Indonesian shares ended higher on Tuesday led by a rebound in cigarette maker Gudang Garam and gains in bellwether Telekomunikasi Indonesia, dealers said.
They said progress on several Asian markets improved sentiment on the local bourse, but lingering concerns over the nation's currency fluctuation discouraged investors from taking strong buying positions.
"But, in terms of value and volume, the trade today was much better than in the previous session," said a trader with Andalan Artha Advisindo. She expects the main index to hit the level of 1110 on Wednesday although profit taking could dampen progress.
The Jakarta Stock Exchange Composite index ended up 0.5 percent, or 5.012 points, at 1105.890 points.
Gainers led decliners 57 to 48, with 70 stocks unchanged. Volume was 1.05 billion shares valued at Rp 912 billion, compared with 645 million shares valued at Rp 714 billion on Monday.
Gudang Garam rose 3.2 percent to Rp 12,750 on a rebound and renewed expectations that the recent government imposed 15 percent increase in cigarette retail prices won't affect its sales much as the company can pass on the hikes to consumers. Garam's rival Hanjaya Mandala Sampoerna gained 2.4 percent to Rp 8,450.
"Their 2005 sales volume may be hurt, but sales value may be flat or even slightly higher from last year," said a tobacco analyst with a state-owned securities firm.
Telkom added 1 percent to Rp 4,875 on expectations the company will pay a higher 2004 dividend and after its American depository receipts in New York rose 0.3 percent to US$20.0. Telkom's rival Indonesian Satellite ended unchanged at Rp 5,400.
Bank Lippo extended its gains for the second consecutive session on news Khazanah Nasional Bhd., Malaysia's state-owned investment arm, has emerged as a main contender to acquire a controlling stake in the bank. Bank Lippo rose 2.8 percent to Rp 1,090.
Dealers said losses in Bank Mandiri on profit taking and as it traded ex-dividend offset the main index's gains.
Bank Mandiri, which finished registering shareholders eligible for its Rp 70 a share dividend on Monday, fell 4 percent to Rp 1,450.
Dealers said they expect the market to trade slightly lower Wednesday on profit taking after gains in the previous four sessions.
The Indonesian rupiah closed steady on Tuesday as capital flows into the local market helped the currency weather the dollar's broad bullishness, dealers said.
The dollar closed at Rp 9,609, little changed from its close on Monday at Rp 9,610.
The greenback rose to an intraday high of Rp 9,640, tracking the dollar's rise versus most global currencies. But the dollar's gains against the rupiah provided an opportunity for offshore investors to buy the rupiah.
Foreign investors bought the rupiah likely because they participated in the government's bond auction on Tuesday. The government issued a total of Rp 3.85 trillion notes at an average 11.25 percent for the 11-year tenor and 11.59 percent for the 15- year tranche. The amount was higher than the Rp 2.5 trillion the government had originally indicated.
Secondly, dealers suspected that the U.S. tobacco company Philip Morris bought the rupiah to settle its recent acquisition in the local cigarette company HM Sampoerna.
"I suspect Philip Morris still needed to buy the rupiah today," a dealer with a foreign bank in Jakarta said.
Dealers expect the dollar's global strength to give it a boost against the rupiah on Wednesday as capital inflows are not expected again.
Dealers expect the greenback to trade between Rp 9,590 and Rp 9,630 on Wednesday.