Shares end higher on late buying in blue chips
Shares end higher on late buying in blue chips
Dow Jones
Jakarta
Indonesian shares ended marginally higher on Tuesday as late
gains in select bank and cement blue chips reversed earlier
losses, dealers said.
Overall sentiment remained cautious due to the prolonged
political uncertainty ahead of the presidential runoff in
September, they added.
"The market slightly recovered from recent sluggish
performance," said a trader with Kuo Capital Securities.
After staying in negative territory for most of the session,
the Jakarta Stock Exchange composite index ended up 2.403 points,
or 0.3 percent, at 752.443, up from an intraday low of 748.719.
Gainers led decliners 65 to 38, with 75 stocks unchanged.
Volume was 727 million shares valued at Rp 544 billion.
Bank Mandiri, the nation's largest lender, rose Rp 25, or 2
percent, to Rp 1,250, and Bank Danamon ended up Rp 25, or 0.8
percent, at Rp 3,300 on a rebound.
Cement maker Semen Gresik jumped Rp 350, or 4.1 percent, to Rp
8,700 on bargain hunting and expectations of higher full-year
earnings. Gresik's rival Indocement Tunggal Prakarsa gained Rp
25, or 1.6 percent, at Rp 1,550.
Shares in heavyweight Telekomunikasi Indonesia succumbed to
profit taking, down Rp 100, or 1.3 percent, at Rp 7,550.
Dealers said they expect the market on Wednesday to trade
higher on a further rebound.
Meanwhile, the rupiah closed lower on Tuesday as the
currency's falling yields in short-term swap transactions
triggered dollar-buying amid expectations of a further rate hike
in the U.S., dealers said.
The dollar closed at Rp 9,200, up from its close of 9,185 on
Monday. The dollar touched an intraday high of 9,275 before
profit-taking erased most of its gains.
The rupiah's short-term yields fell because banks in Jakarta
adjusted their foreign exchange positions to comply with the
central bank's new regulation on foreign exchange net open
positions.
The central bank has set Sept. 2 as the deadline for banks to
bring down the on-balance sheet foreign exchange net open
position to a maximum 20 percent of capital.
The overnight swap point, which shows the rupiah overnight
swap yields, fell to 0.0-0.2 point, from 0.5-1.0 point on Monday,
and the on-week swap point dropped to 1.0-3.0 points from 4.0-6.0
points, dealers said.
"The adjustment made the rupiah yields in the swap transaction
cheap, which triggered dollar-buying amid expectations of a
further rate hike in the U.S.," a dealer said.
In a meeting later on Tuesday, the U.S. Fed is widely expected
to raise the overnight lending rate by 25 basis points to 1.50
percent.
Bank Indonesia Governor Burhanuddin Abdullah told reporters
earlier on Tuesday that the central bank "keeps rate hike option
open" if the rupiah is under pressure again.
"For us, the (rupiah's) stability cannot be forsaken," he
said.
Dealers said demand from local importers, such as national oil
company Pertamina, also helped push the dollar higher.
The current rise in oil prices is boosting the amount of
dollars Pertamina needs, dealers said.
They expect the dollar to trade between 9,190 and 9,280 on
Wednesday.