Shares end higher; Telkom leads gainers
Shares end higher; Telkom leads gainers
Dow Jones, Jakarta
Indonesian shares reversed early losses to end slightly higher on
Monday on confidence among foreign investors of continued
economic recovery, led by gains in PT Telekomunikasi Indonesia
(Telkom), dealers said.
The Jakarta Stock Exchange's Composite Index ended up 5.892
points, or 0.5 percent at 1147.71, from an intraday low of
1134.307 points.
Decliners led gainers 64 to 60, with 66 stocks unchanged.
Trade volume totaled Rp 1.7 trillion (US$176.29 million).
"Foreign capital inflows continued today, I think because
foreign investors see the economy is on the right track and
President Susilo Bambang Yudhoyono is making a serious effort to
combat corruption," a dealer with a foreign securities firm said.
The government recently raised its 2005 economic growth target
to 6 percent from 5.4 percent. Meanwhile, the official anti-
corruption committee has named several former government
officials and politicians as suspects in corruption
investigations.
Leading gainers was Indonesia's largest telephone services
provider Telkom, which rose 2.9 percent to Rp 5,350 on
expectations it will pay higher dividends for 2004, dealers said.
Retailer Ramayana Lestari closed up 1.2 percent at Rp 820 on
news it will allocate 67 percent of last year's net profit for a
dividend payment.
Bank Mandiri, the country's largest lender, gained 1.4 percent
to end at Rp 1,480 on bargain hunting.
Oil and gas producer Medco Energi firmed 4 percent to Rp 3,900
as rising oil prices are expected to boost its net profit.
The country's second largest telecommunications company,
Indonesian satellite, ended down 0.9 percent at Rp 5,600 on
continued profit taking, along with cement producer Semen Gresik,
which edged down 0.5 percent to Rp 18,300.
Dealers expect gainers to extend their rally on Tuesday, with
investors seen likely try to push the index to break its record
high of 1152.601 points posted on March 22.
The Indonesian rupiah closed lower on Monday due to
traditional end-month dollar demand from local corporate, dealers
said.
The dollar closed at Rp 9,643, up from its close Friday at Rp
9,620.
Dealers said dollar-buying by state oil and gas firm PT
Pertamina to pay for its monthly oil import bills was a major
factor in that result.
"This is purely on local demand...related to Pertamina buying
dollars through state banks," a trader at a foreign bank said.
The dollar-buying was also linked to banks squaring their
positions ahead of the implementation of new foreign exchange
regulations next month.
Bank Indonesia said late Wednesday that effective July 14, it
will cut foreign-exchange derivative transaction sizes by banks
here with foreign counterparts against the rupiah to a maximum of
US$1 million from $3 million.
Dollar purchases in outright forward transactions and swaps
are also limited to a $1 million total. These types of
transactions weren't subject to any cap previously.
The central bank also imposed a three-month minimum investment
hedging period on foreign-exchange transactions.
That stipulation means that investors with underlying
investments in Indonesia must keep their funds in the country for
at least three months, an official with the central bank said.
Previously, such deals had no minimum time period.
Dealers expect the dollar to trade between Rp 9,620 and Rp
9,665 on Tuesday.