Shares end on high, Garam, Sampoerna smoking hot

Shares end on high, Garam, Sampoerna smoking hot

Dow Jones, Jakarta

Indonesian shares ended at a new high on Tuesday on gains in cigarette makers Gudang Garam and Hanjaya Mandala Sampoerna, dealers said.

"It was a mixed market, but gains in the tobacco blue chips drove the main index higher," said a trader with Kuo Capital securities.

Dealers said overall sentiment remained cautious due to an absence of fresh leads. Many investors also remained on the sidelines ahead of the U.S. Federal Open Market Committee's meeting later this week, which is widely expected to result in an interest rate increase.

The Jakarta Stock Exchange Composite Index ended up 2.097 points, or 0.2 percent, at 1047.53.

Decliners, however, led gainers 63 to 54, with 90 stocks unchanged.

Volume was 1.8 billion shares valued at Rp 1.4 trillion, compared with 2.1 billion shares valued at Rp 1.5 trillion on Monday.

Gudang Garam, the nation's largest cigarette maker, gained 0.9 percent to Rp 17,000 on a rebound. Garam's rival Sampoerna, the nation's third-largest cigarette producer, rose 3.4 percent to Rp 7,700 on expectations of a rise in 2004 net profit due to an increase in sales.

Dealers said investors bought back shares in telecommunications blue chips on expectations of higher 2004 earnings. The companies are expected to announce their earnings later this month.

Bellwether Telekomunikasi Indonesia (Telkom) ended 1 percent higher at Rp 4,825 on a rebound and after its American Depositary Receipts rose 0.3 percent to US$20.75.

Indonesian Satellite (Indosat) advanced 0.9 percent to Rp 5,750.

Dealers said shares in select bank blue chips succumbed to selling pressure on expectations that the central bank will hike interest rates to combat rising inflation.

Bank Mandiri fell 0.5 percent to Rp 1,930 and Bank Rakyat dropped 1.8 percent to Rp 2,700.

Dealers said they expect the market to trade higher on Wednesday on follow-through buying in cigarette blue chips

Meanwhile, the rupiah closed lower as market participants covered dollar-short positions ahead of several key events coming in the next two weeks, dealers said.

Concerns about rising inflation in Indonesia also supported the U.S. currency, with the dollar closing at Rp 9,240, up from its close on Monday at Rp 9,160.

"Market participants locked in their profit ahead of several events which may affect the dollar's movement globally," a dealer said. He cited the U.S. Federal Reserve's meeting later this week and the G-7 meeting next week.

News that on-year inflation unexpectedly accelerated to 7.32 percent in January from 6.40 percent in December helped fuel dollar buying, dealers said.

The average forecast of five analysts surveyed by Dow Jones was 6.44 percent.

The official Central Bureau of Statistics (BPS) said on Tuesday that the country experienced higher inflation in January mainly due to higher food prices.

Analysts said that inflation could rise further later this year if the government goes ahead with a plan to increase domestic fuel prices.

Dealers said Bank Indonesia was heard calling dealers to find out the reasons for the dollar's rise against the rupiah, but it didn't intervene in the market to support the rupiah.

Dealers expect the dollar to trade between Rp 9,200 and Rp 9,275 on Wednesday.