Shares end up; Tobacco drives index higher

Shares end up; Tobacco drives index higher

Dow Jones, Jakarta

Indonesian shares ended higher on Thursday, with further foreign program buying in cigarette blue chips driving the main index to another record high closing, dealers said.

The Jakarta Stock Exchange Composite Index ended up 7.479 points, or 0.7 percent, surpassing Wednesday's record to hit a fresh high of 1044.99.

They said buying was also boosted by news that Fitch Ratings upgraded the country's long-term foreign and local currency ratings to BB- from B+.

The international ratings agency also affirmed its short-term rating at B. The outlook on the ratings remains positive, it said.

This rating action reflects Indonesia's reduced political risk, better policy initiation and coordination, anticipated bureaucratic and legislative reforms, stronger economic growth and continued improvements in the nation's public and external finances, Fitch said.

"The new ratings strengthened investors' sentiment to continue to accumulate Indonesian shares," said a trader with Kuo Capital Securities.

Gainers led decliners 72 to 53, with 87 stocks unchanged.

Volume was 5.8 billion shares valued at Rp 2.5 trillion, compared with 2 billion shares valued at Rp 1.56 trillion on Wednesday.

Cigarette maker Gudang Garam jumped 10 percent to Rp 16,200 on expectations that the company will increase product prices this year to boost sales. Garam's rival Hanjaya Mandala Sampoerna rose 3.4 percent to Rp 7,550.

Also higher were food maker Indofood Sukses Makmur, which gained 4.7 percent to Rp 900 on its plan to sell a stake in its flour mill division, Bogasari Flour Mills, in the second quarter of this year.

Profit-taking, however, hit telecommunications blue chips, capping further gains in the main index.

Telkom fell 1 percent to Rp 4,800 and Indonesian Satellite dropped 2.6 percent to Rp 5,700.

Dealers said they expect the market to trade slightly lower on Friday on profit-taking after the main index gained in the previous two sessions.

Meanwhile, the rupiah closed steady for the second day in a row on Thursday, as dollar demand from local companies offset a Fitch Ratings upgrade of Indonesia's long-term foreign and local currency ratings, dealers said.

The dollar closed unchanged at Rp 9,145 after trading between Rp 9,125 and Rp 9,150 earlier in the day.

Local companies traditionally increase dollar purchases ahead of the month-end to pay maturing offshore obligations.

Dealers expect dollar bids from local companies to remain healthy until Monday.

They expect the dollar to trade between Rp 9,120 and Rp 9,170 on Friday.