Stock index hit record high, Telkom leads gainers
Stock index hit record high, Telkom leads gainers
Dow Jones, Jakarta
Indonesian shares ended higher on Tuesday led by earnings inspired gains in bellwether Telekomunikasi Indonesia, which drove the main index to end at a fresh record high, dealers said.
They said the firmer rupiah against the U.S. dollar and gains in many Asian markets improved sentiment on the local bourse after the main index fell in the previous two sessions due to profit taking.
"The market recovered quickly from recent falls and many investors now expect the main index to test the important level of 1,200 later this week," said a trader with Andalan Artha Advisindo.
The Jakarta Stock Exchange's Composite Index ended up 0.9 percent, or 11.10 points, to hit an all-time closing high of 1,189.33.
Gainers led decliners 77 to 32, with 90 stocks unchanged. Volume, however, fell to 1.35 billion shares valued at Rp 1.12 trillion, compared with 1.55 billion shares valued at Rp 1.33 trillion on Monday.
Telkom rose 3.6 percent to Rp 5,700 after posting strong first half earnings and also on renewed expectations that the company could weather stiffer competition in the wake of Hutchinson Telecommunications International Ltd.'s plan to enter the Indonesian market.
"A new entrant wouldn't pose a big threat to Telkom (as) it would be difficult to expand a network and build market share here," said UBS Securities in a research note.
UBS upgraded Telkom's price target to Rp 6,300 from Rp 5,800, reflecting an increase in subscribers forecast for this year.
Dealers also bought shares in paper producer Pabrik Kertas Tjiwi Kimia, which rose 7.3 percent to Rp 3,325, after the company said its first-half net profit rose by more than five times to $24.91 million.
Elsewhere, Bank Central Asia added 2.8 percent to Rp 3,725 on expectations that the government will proceed with its plan to sell a 5 percent stake in the bank later this year.
On the downside, Bank Rakyat Indonesia fell 1.5 percent to Rp 3,250 on swift profit taking after rising 3 percent on Monday.
Dealers said they expect Indonesian shares to trade higher on Wednesday, led by followthrough buying in Telkom.
Meanwhile, the rupiah closed higher against the greenback due to monthly cyclical slowing in domestic corporate demand for dollars, dealers said.
The dollar closed at Rp 9,745, compared with Rp 9,775 on Monday.
A dealer at a foreign bank in Jakarta said that there was an easing in local companies' appetite for dollars, which traditionally peaks at the end of a month.
"Apparently the demand for dollars by onshore corporates has been reduced quite a lot because they're usually buying from the middle of each month to the end of the month," the dealer said.
The U.S. unit's regional weakening bias also helped the rupiah, dealers said. The greenback lost ground against major Asian currencies on Tuesday, including the yen, the won and the New Taiwan dollar.
"The dollar is basically weakening against all regional currencies, and the rupiah got some help from the renewed strength of the Asian currencies," a dealer said.
Dealers expect the dollar to trade lower around Rp 9,725 on Wednesday with resistance at Rp 9,800.