Shares end up, led by gains in Astra

Shares end up, led by gains in Astra

Dow Jones/Jakarta

Indonesian shares ended higher on Thursday led by gains in automotive company Astra International which was in demand on plans to pay a Rp 270 a share dividend June 21, dealers said.

They said news that Indonesia's annual inflation in May slowed to 7.40 percent from 8.12 percent in April boosted overall sentiment.

"The slow inflation figure was good news and it renewed expectations that the interest rate won't increase significantly for the remainder of the year," said a fund manager with Paramitra Securities.

The Jakarta Stock Exchange Composite Index on Thursday ended up 8.524 points, or 0.8 percent, at 1091.465.

Decliners, however, led gainers 59 to 54, with 68 stocks unchanged.

Volume was 1.15 billion shares valued at Rp 1.4 trillion, compared with 2.75 billion shares valued at Rp 1.8 trillion on Wednesday.

Astra International rose 3.3 percent to Rp 12,400 also on expectations of improved first half earnings due to an increase in sales.

Dealers said investors also bought shares in bellwether Telekomunikasi Indonesia on expectations that the company will give a higher 2004 dividend. Telkom gained 1.6 percent to Rp 4,825 and rival Indonesian Satellite rose 2.5 percent to Rp 5,150.

Also higher were shares in oil producer Medco Energi, which ended up 3.9 percent at Rp 3,300 on expectations of higher first half earnings due to rising oil prices.

Shares in Bank Mandiri, the nation's largest lender by assets, succumbed to selling pressure after it reported that its first quarter net profit fell 70 percent on year due to higher bad loan provisions and a drop in net interest income.

Dealers said they expect the market to trade higher on Friday on follow-through buying in Astra international and telecommunication blue chips.

The Indonesian rupiah closed lower Thursday on the dollar's strength against major currencies, particularly the euro, dealers said.

However, the dollar's gains were capped as investors took profit, and on capital inflows linked to the stock market, they said.

The dollar closed at Rp 9,565, up from Rp 9,555 on Wednesday.

The U.S. unit reached an intraday high of Rp 9,595, but fell back when profit-taking kicked in. Dealers also observed capital inflows likely linked to the local stock market, helping the rupiah recover slightly.

"I think Philip Morris sold dollars again today," a dealer said.

Market players believe the U.S. tobacco company has been accumulating the rupiah since last month to pay for its purchase of a 58 percent stake in Indonesia's third largest cigarette maker, HM Sampoerna.

Dealers expect the dollar to trade between Rp 9,550 and Rp 9,600 on Friday, depending on its movement against other hard currencies.