Jakarta share prices closed 0.32 percent higher on Wednesday, with the main index finishing at a new record, driven by gains in heavyweight Telkom and its rival Indosat, dealers said. They said the upside however was limited by sharp losses in gas distributor Perusahaan Gas Negara (PGN).
The Jakarta Stock Exchange composite index closed up 6.986 points at 2,196.105, beating the previous all-time high of 2,189.119 set Tuesday. Volume was 4.25 billion shares worth 4.7 trillion rupiah (521.24 million dollars). The rupiah was trading at 9,000/9,010 to the dollar against 9,015/9,025 late Tuesday.
Telkom rose 350 rupiah or 3.5 percent to 10,350, while Indosat gained 200 or 2.9 percent to 7,050. Trade Minister Mari Pangestu said the new ruling will only apply to newly-established companies or those seeking new licensing from the government. UOB Kay Hian analyst David Chang said the recent rally in Telkom shares, to some extent, shows investors are more upbeat about the earnings prospect of telecom companies as a result of lower interest rates.
Most economists polled by Thomson Financial expect Bank Indonesia to further cut its benchmark interest rate, called the BI rate, by 25 basis points at tomorrow's policy meeting.
UOB's Chang also said the sell-off in PGN reflects investors displeasure over the delay in the completion of one of the company's pipeline projects as well as the likelihood that its planned gas price increase will be postponed.
PGN lost 500 rupiah or 5.4 percent to 8,700. Earlier, Citigroup said it has cut its net profit forecasts for PGN for 2007 to 2009 by 19.9-38.0 percent on the assumption that an increase in selling prices of its gas will be delayed, and smaller than first thought.
Among other losers, Gudang Garam dropped 100 or 0.9 percent to 10,900 after Citigroup reiterated its 'sell' rating on the stock, sparked by recent data that showed Gudang Garam had been displaced by HM Sampoerna as the country's biggest producer of cigarettes.
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