Shares end up; Telkom leads on expansion

Shares end up; Telkom leads on expansion

Dow Jones, Jakarta

Indonesian shares ended higher on Thursday led by a further
rebound in Telekomunikasi Indonesia on the company's plan to buy
a stake of up to 30 percent in an Asian-based telecommunication
company next year, dealers said.

They added that gains on many Asian markets added to positive
sentiment, with investors also expecting local shares to continue
to recover from sharp losses early this week due to improving
political stability under the new government.

The Jakarta Stock Exchange Composite Index ended up 18.015
points, or 1.9 percent, at 957.166, extending its 1.9 percent
gain on Wednesday.

Gainers led decliners 99 to 29, with 72 stocks unchanged.
Volume was 2.5 billion shares valued at Rp 1.5 trillion, compared
with 1.1 billion shares valued at Rp 1.1 trillion on Wednesday.

Bellwether Telekomunikasi Indonesia gained 2.6 percent to Rp
4,875 and rival Indonesian Satellite ended up 1.8 percent at Rp
5,600.

Dealers said bargain-hunters continued to buy back cigarette
blue chips on expectations that the companies will distribute
higher dividends early next year.

Cigarette maker Hanjaya Mandala Sampoerna was up 3.2 percent
at Rp 6,450 and rival Gudang Garam gained 1.2 percent to Rp
13,050.

Also higher were shares in Bank Mandiri, which rose 1.4
percent to Rp 1,825, and Bank Danamon, which gained 3 percent to
Rp 4,250.

Dealers said they expect the market Friday to trade higher led
by further buying in Telkom.

Meanwhile, the rupiah ended lower on Thursday as local
corporate bought the U.S. dollar after its fall on Wednesday,
dealers said.

The dollar finished at Rp 9,270, up from its close on
Wednesday at 9,260. The U.S. unit hit an intraday low of 9,230.

"There were fresh bids from local players to buy back the
dollar at the 9,230 level," said a trader with a foreign bank.

Traders say the overall mood was cautious with many holding
back their orders to buy the U.S. unit amid worries that Bank
Indonesia might intervene further in the market to defend the
rupiah.

Wednesday, traders suspected the central bank sold dollars to
stop the U.S. currency from rising above 9,400, which would have
been a six-month high.

Analysts say Bank Indonesia needs to stop the rupiah from
falling further to help curb imported inflation. If it does so,
the central bank doesn't have to raise interest rates - which
could hurt the economy.

"The dollar regained ground due to healthy bids from local
importers...," another trader with a state-owned bank said
Thursday. Moreover, the central bank is suspected to have sold
only modest amounts of the greenback Wednesday, the trader said.

Demand for the dollar is usually robust toward the year-end as
local companies repay maturing offshore debts. Local companies
are saddled with around $60 billion in offshore borrowings.

Dealers expect the U.S. currency to trade between 9,250 and
9,325 Friday.