Shares end up led by gains in second-liners

Shares end up led by gains in second-liners

Dow Jones, Jakarta

Indonesian shares ended higher at yet another fresh closing high on Tuesday as investors snapped up second- and third-liner shares following recent gains by blue chips, dealers said.

The Jakarta Stock Exchange Composite Index ended up 6.135 points, or 0.6 percent, at 1099.91 points.

Gainers led decliners 105 to 50, with 75 stocks unchanged.

Volume was 2.6 billion shares versus 2.7 billion on Monday, with value at Rp 1.9 trillion compared to Rp 2 trillion.

"Local investors snapped up smaller shares as they have relatively underperformed the overall market," said a dealer with a local securities firm.

Pharmaceutical company Kalbe Farma led gainers, rising 11.4 percent to Rp 880, followed by timber company Barito Pacific, which gained 7.6 percent at Rp 1,270, and tire maker Gajah Tunggal, which added 2.2 percent to Rp 920.

Trading of blue chips, however, was mixed as some were hit by profit-taking.

The country's largest cigarette maker Gudang Garam fell 0.6 percent to Rp 16,350, the nation's second largest telephone company Indonesian Satellite dropped 0.9 percent to Rp 5,450, and cement producer Semen Gresik lost 0.5 percent to Rp 19,600.

Bellwether stock Telkom rose 0.5 percent to Rp 4,650, cigarette producer HM Sampoerna gained 0.6 percent to Rp 8,050, automotive company Astra International edged up 0.5 percent to Rp 11,150, and the country's largest lender Bank Mandiri increased 2.7 percent at Rp 1,920.

Dealers expect further buying of second-liner stocks, especially banks.

Meanwhile, the rupiah ended sharply higher due to capital inflows linked to a government bond issue and the dollar's slide versus most other regional currencies, dealers said.

The dollar closed at Rp 9,205, down from its close on Monday at Rp 9,275.

"There was quite a large amount of dollar-selling by offshore names today, probably related to the government bond auction," a dealer with a foreign bank said.

The government issued Rp 3 trillion of 12-year bonds on Tuesday, higher than its indicative target of Rp 2 trillion, due to healthy demand from investors.

A threat of rising inflation, however, tempered demand slightly compared with last month, a government official said.

Dealers said that the dollar's slide against most other regional rivals also accentuated its fall against the rupiah, dealers said. The dollar was trading at 104.15 against the yen at 0944 GMT, down from 105.57 late on Monday.

Dealers expect the dollar to trade between Rp 9,150 and Rp 9,200.

"I think market players will buy back the dollar around Rp 9,150," another dealer said.

Caution over possible protests against the government's plan to raise domestic fuel prices will likely deter market participants from pushing the greenback below Rp 9,150.