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.