Shares end up at record high on earning hopes

Shares end up at record high on earning hopes

Dow Jones, Jakarta

Indonesian shares ended higher on Tuesday, with further gains in cigarette and telecommunication blue chips on hopes of robust 2004 earnings pushing the main index to a record closing high, dealers said.

They also added that investors bought shares on expectations that those companies with solid earnings will pay out a higher 2004 dividend.

"If buying continues, the main index may test solid resistance at 1,080 later this week," said an analyst with a foreign securities firm.

The Jakarta Stock Exchange Composite Index ended up 16.467 points, or 1.6 percent, at 1,067.20.

Gainers led decliners 62 to 35, with 64 stocks unchanged.

Volume was 2.2 billion shares valued at Rp 1.78 billion, compared with 1.5 billion shares valued at Rp 1.6 trillion on Monday.

Hanjaya Mandala Sampoerna, the nation's third-largest cigarette producer, jumped 9.4 percent to Rp 8,150 on expectations of higher 2004 net profit after the company reported that 2004 sales rose 15 percent on year.

Sampoerna's rival Gudang Garam rose 1.2 percent to Rp 16,750.

Bellwether Telekomunikasi Indonesia gained 2.2 percent to Rp 4,750 and carmaker Astra International rose 3.5 percent to Rp 10,400.

These companies are expected to announce their 2004 earnings later this month or in early March.

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

Meanwhile, the rupiah ended lower as local banks bought the dollar on expectations of gains in the U.S. unit after U.S. Federal Reserve Chairman Alan Greenspan delivers semiannual testimony to Congress on Wednesday and Thursday, dealers said.

The dollar closed at Rp 9,275, up from Monday's close at Rp 9,242.

"We bought the dollar on the expectation Greenspan will make positive comments about the U.S. economy that will boost the dollar," a dealer with a local bank said.

A dealer with a European bank in Jakarta said some foreign investors also bought the greenback, likely to hedge their derivative transactions.

Dealers expect the dollar to trade between Rp 9,250 and Rp 9,290 on Wednesday.

The local currency market will also be keen to see data on Indonesia's gross domestic product, due on Wednesday.

An average estimate by six economists polled by Dow Jones put Indonesia's economic growth at 5.1 percent on year in the October-December period, accelerating slightly from 5.0 percent in the third quarter.