Shares up, led by gains in Semen Gresik

Shares up, led by gains in Semen Gresik

Dow Jones, Jakarta

Indonesian shares ended higher on Tuesday driven by late buying in cement maker Semen Gresik on solid 2004 earnings and sharp gains in plantation stocks, dealers said.

"The market slightly recovered from recent sluggish performance," said a trader with Paramitra Securities.

Dealers said overall sentiment, however, remained cautious given falls in key Asian markets such as Japan and Korea and lingering worries that the central bank will increase its key interest rate to fight rising inflation.

After staying in negative territory for most of the session, the Jakarta Stock Exchange Composite Index ended up 4.902 points, or 0.4 percent, at 1110.884, up from an earlier low of 1104.897.

Gainers led decliners 86 to 55, with 68 stocks unchanged.

Volume was 1.3 billion shares valued at Rp 1.3 trillion (US$136.99 million), compared with 1.2 billion shares valued at Rp 1.2 trillion on Monday.

Semen Gresik, the nation's largest cement producer, jumped 3.7 percent to Rp 16,950 after the company said its 2004 net profit rose 30 percent.

Gresik rival Indocement Tunggal Prakarsa rose 3.3 percent to Rp 3,175 and Semen Cibinong gained 5.95 to Rp 540. Dealers also attributed gains in cement shares to expectations of improved 2005 earnings due to rising local demand.

Crude palm oil producer London Sumatra jumped 22 percent to Rp 2,400 and rival Astra Agro Lestari gained 3.1 percent to Rp 4,100 on expectations of solid first-quarter earnings.

Dealers said investors continued to sell shares in Bank Mandiri, down 1.7 percent, at Rp 1,690 following news that the attorney general's office is investigating the bank's management over alleged corruption.

Dealers expect the market to trade higher Wednesday on follow- through buying in cement blue chips.

The Indonesian rupiah ended flat in quiet trading on Tuesday as dollar demand from local companies offset the impact of the dollar's slide against major rivals on the local currency, dealers said.

The dollar closed unchanged at Rp 9,490, after trading between Rp 9,478 and Rp 9,492.

Dealers said that the dollar-rupiah opened with a soft tone as the upcoming U.S. trade data are expected to show a further widening trade deficit.

But local companies entered the market accumulating dollars when the U.S. currency began to slide.

"The dollar's slide was reversed by local companies," a dealer with a foreign bank said.

Local companies are saddled by offshore borrowings. The need to raise dollars to settle payment of these offshore loans usually weighs on the rupiah.

Dealers said that the local foreign exchange market will continue to take a lead from the dollar's movements against other major currencies on Wednesday.

They said the dollar could trade anywhere between Rp 9,480 and Rp 9,515 on Wednesday.