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.