Shares end lower on cabinet caution

Shares end lower on cabinet caution

Dow Jones, Jakarta

Indonesian shares ended lower on Wednesday, hurt by uncertainty ahead of the new cabinet lineup announcement and losses in most Asian markets, dealers said.

New President Susilo Bambang Yudhoyono was scheduled to name his cabinet Wednesday evening. The lineup has been the subject of intense speculation in the local media and was eagerly awaited by financial markets. Investors are keen to gauge Susilo's commitment to fighting corruption and fixing the country's economic woes - two of his key campaign promises.

"Investors consolidated their positions ahead of the cabinet announcement," said a trader with Kuo Capital securities.

He said the market will get a boost if the new president announces a market-friendly cabinet.

The Jakarta Stock Exchange Composite index ended down 12.602 points, or 1.5 percent, at 840.791.

Decliners led gainers 132 to 17, while 67 stocks were unchanged. Volume was 1.9 billion shares valued at Rp 1.6 trillion.

Bellwether Telekomunikasi Indonesia fell 1.7 percent to Rp 4,325 on swift profit-taking after the stock gained 2.9 percent Wednesday.

Indonesian Satellite Corp. ended down 1.7 percent at Rp 4,350.

Dealers said investors continued selling bank stocks on renewed expectations that the central bank will further raise interest rates in coming months to combat rising inflation.

Bank Mandiri, the nation's largest lender, lost 1.7 percent to Rp 1,450 and Bank Danamon dropped 3.4 percent to Rp 3,535.

Dealers said they expect the market on Thursday to trade flat to slightly higher on a rebound after falling in the previous five sessions.

Meanwhile, the rupiah closed unchanged, with demand from local companies lifting the dollar from its earlier low, dealers said.

The dollar ended at Rp 9,080, unchanged from Tuesday, after hitting an intraday low of 9,050.

Dealers said the dollar managed to recover from its low as local companies with foreign debt started to buy the currency to meet their month-end obligations.

Overall sentiment was cautious, with many investors staying on the sidelines due to worries that the new Cabinet might not meet the market's expectations.

Traders expect the rupiah to trade between 9,050 and 9,150 Thursday.