Shares end lower; Sampoerna down

Shares end lower; Sampoerna down

Dow Jones, Jakarta

Indonesian shares ended lower on Tuesday, led by profit-taking in cigarette blue chips and selling in Bank Mandiri on expectations that the bank will book lower first-quarter earnings because of higher loan-loss provisions, dealers said.

The day's losses echoed declines in other regional markets, but gains in bellwether Telekomunikasi Indonesia helped prevent the key stock index from falling further.

The Jakarta Stock Exchange Composite Index ended down 4.481 points, or 0.4 percent, at 1119.001, off the session's low of 1112.103.

Decliners outnumbered gainers 81 to 59, with 83 stocks unchanged.

Volume amounted to 2.6 billion shares valued at Rp 2.8 trillion, from 2.3 billion shares valued at Rp 2.8 trillion on Monday.

Profit-taking hurt shares of cigarette maker HM Sampoerna, which fell 1.9 percent to end at Rp 10,200. Sampoerna shares rose 18 percent on Monday on news that Philip Morris will pay Rp 10,600 a share for a 40 percent stake in the company.

Rival cigarette maker Gudang Garam fell 4.6 percent to Rp 17,550, also on profit-taking, after a 13 percent jump on Monday.

Also down was Bank Mandiri, which shed 3.9 percent to Rp 1,710, and Bank Negara Indonesia, which fell 2.8 percent to Rp 1,750. Apart from profit-taking, dealers attributed the selling in banking stocks to renewed worries that the central bank will raise interest rates to curb rising inflation stemming from recent fuel price hikes.

Meanwhile, Telkom shares rose 1.7 percent to Rp 4,375, rebounding after sharp losses last week on expectations that the company would report weaker 2004 earnings later this month.

Plantation stocks continued to extend their gains on anticipation of a better 2005 due to firmer commodity prices.

Shares of crude palm oil producer Astra Agro Lestari added 8.2 percent to Rp 3,975 while those of its rival London Sumatra gained 2.2 percent to Rp 1,850.

Dealers expect the market to move lower Wednesday on further profit-taking in cigarette blue chips.

Meanwhile, the rupiah ended higher on Tuesday as news of Philip Morris buying a stake in a local cigarette company continued to help sentiment.

The dollar ended at Rp 9,350, down from Monday's close of Rp 9,375.

The U.S. tobacco company said on Monday it agreed to buy a 40 percent stake in HM Sampoerna for $2 billion and would increase that amount to about $5 billion if it manages to buy the remaining 60 percent.

The market took the news as a further sign of improving sentiment toward Indonesia amid increasing political and economic stability.

However, dealers said that despite the huge amount of cash Philip Morris is spending on the acquisition, actual fund inflows may not be as large as expected as most of the cash is likely to be kept in offshore accounts.

Nevertheless, "it (Philip Morris's acquisition) is such a big deal for Indonesia that the market can't ignore it completely," a dealer with a foreign bank said.

Dealers said abating dollar demand from local companies also helped the rupiah. Local companies were cited as the main dollar buyers ON Monday, likely buying to hedge their offshore obligations.

Dealers expect the dollar to trade between RP 9,325 and RP 9,365 on Wednesday.