Shares lower on bird flu outbreak

Shares lower on bird flu outbreak

Dow Jones, Jakarta

Indonesian shares ended lower on Tuesday, weighed by worries over
the bird flu outbreak's impact on the economy, dealers said.

Analysts say if health conditions in the country worsen, it
may discourage foreign investment and hurt the economy.

"Investors consolidated their positions, watching government
moves to prevent the deadly virus from spreading," said a trader
with Paramitra Securities.

The Indonesian government imposed "extraordinary" measures on
Tuesday to keep the avian influenza outbreak -- which has so far
killed four people in Indonesia -- from spreading, including the
forced hospitalization of people who exhibit symptoms of the
disease.

In addition to the fatalities, six patients suspected of
having contracted the H5N1 strain of bird flu have been admitted
to Jakarta's infectious diseases hospital, officials said, two of
them zoo employees.

Bucking bullish sentiment on regional markets, the Jakarta
Stock Exchange Composite index ended down 1 percent, or 11.000
points, at 1055.591.

Gainers led decliners 90 to 20, with 58 stocks unchanged.

Volume was 932 million shares valued at Rp 1.0 trillion,
compared with 550 million shares valued at Rp 941 billion on
Monday.

Bellwether Telekomunikasi Indonesia (Telkom) fell 1.9 percent
to Rp 5,200 on profit taking after gaining 2.9 percent on Monday.
Telkom's rival Indonesian Satellite (Indosat) also lost 1.9
percent to end at Rp 5,200 also on profit taking after rising 3.9
percent on Monday.

"Concerns over the bird flu outbreak spurred profit taking in
most blue chips," said another trader with a foreign securities
firm.

Shares in automotive company Astra International lost 2.5
percent to Rp 9,900 on expectations of lower 2005 sales, as a
result of a government plan to increase fuel prices early next
month.

Traders said investors continued to sell banking shares on
expectations of poor 2005 earnings following a high interest
rate.

Bank Mandiri, the nation's largest bank by assets, dropped 1.4
percent to Rp 1,390, while Bank Danamon fell 4.6 percent to Rp
4,125.

Dealers said they expect shares to trade lower on Wednesday on
further selling in telecommunications and bank blue chips.

Meanwhile, the rupiah closed lower on Tuesday as globally
rising oil prices gave market participants an excuse to buy the
dollar, dealers said.

The dollar closed at Rp 10,195 versus its close on Monday at
Rp 10,150.

"The oil price rise to around US$67 per barrel overnight from
around $63 on Friday gave players reason to buy the dollar," a
dealer with a local bank said. Rising oil prices aren't good for
the rupiah as they increase Indonesia's fuel import bill.

Dealers, however, said trading was smooth and quiet as the
market has long factored in global oil prices into the dollar-
rupiah levels.

"The market has been steady recently. It isn't surprising that
people will use any news to move the market," a dealer with a
foreign bank said.

Dealers added there were no signs that Bank Indonesia
intervened to limit the rupiah's losses.

Meanwhile, the market ignored the new average dollar-rupiah
assumption the government and the parliament agreed to Tuesday to
base the 2005 Budget. They agreed to revise the projection to Rp
9,800 from Rp 9,500 originally to better reflect the recent
fluctuations in the local currency.

Dealers expect the dollar to trade between Rp 10,150 and Rp
10,200 on Wednesday.