Shares end higher on gains in Telkom, Bank Lippo

Shares end higher on gains in Telkom, Bank Lippo

Dow Jones, Jakarta

Indonesian shares ended marginally higher on Monday, with gains in bellwether Telekomunikasi and Indonesia Bank Lippo driving the main index to break above the key level of 1,100 points.

The Jakarta Stock Exchange Composite index ended up 0.4 percent, or 3.946 points, at 1100.878 points.

The index last touched 1,100 points on April 15, before falling due to worries over rising interest rates.

Gainers led decliners 60 to 40, with 64 stocks unchanged.

Volume was 645 million shares valued at Rp 714 billion, compared with 1 billion shares valued at Rp 968 billion on Friday.

Telkom gained 1.6 percent to close at Rp 4,825 on expectations the company will pay a higher 2004 dividend and after its American depositary receipts in New York rose 2.5 percent to US$19.95. Telkom's rival Indonesian Satellite ended up 1.9 percent at Rp 5,400 on expectations of improved first-half earnings.

Bank Lippo rose 3.9 percent to Rp 1,060 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.

However, dealers said overall sentiment remained cautious over renewed concerns that the rupiah will fall further on rising dollar demand from importers to finance imports ahead of the end of the month.

The dollar was trading higher at Rp 9,610, compared with its previous close at Rp 9,589 Friday on broad bullish sentiment over the dollar.

Oil and gas producer Medco Energi fell 6.3 percent to Rp 3,750 on profit taking after 17 percent gains on Friday ahead of its plan to sell a 40 percent stake through a secondary offering on the Luxembourg bourse in the second half of the year.

Dealers said they expect the market to continue its rise on Tuesday led by further gains in Telkom.

The Indonesian rupiah closed lower on Monday on broad bullish sentiment toward the dollar globally, but suspected Bank Indonesia intervention helped the local unit recoup some of its losses, dealers said.

The dollar closed at Rp 9,610, up from its close on Friday at Rp 9,590.

The greenback jumped to an intraday high of Rp 9,645 early in the day as market participants looked to the dollar's rise versus other major rivals for direction in the local foreign-exchange market amid a lack of fresh domestic factors.

Later in the day, the central bank was suspected of supplying dollars to the market to aid the rupiah. This in turn triggered profit-taking against the dollar, dealers said.

"The market has been caught long on dollars, and Bank Indonesia's intervention served as a catalyst for profit-taking," a dealer with a European bank said.

Dealers expect the dollar could continue to trade above Rp 9,600 on Tuesday, but that Bank Indonesia will likely remain vigilant in defending the rupiah.

"I think Rp 9,645-50 will be a good resistance level for the dollar tomorrow," another dealer said.