Indonesian shares end at fresh record ahead of US rate decision - UPDATE |
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Tue, 11 Dec 2007 10:22
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JAKARTA (Thomson Financial) - Indonesian shares closed higher Tuesday, with the main index finishing at a new high, on follow-through buying ahead of tonight's interest rate decision by the US Federal Reserve.As the market is widely expecting the Fed to lower its key rate by 25 basis points, a reduction bigger than that could spark a further rally in Indonesian shares tomorrow.Key gainers included coal giant Bumi Resources, which continued to attract buyers on stronger coal prices, and the country's sixth largest bank, Bank Internasional Indonesia (BII).BII was actively bought following news that Temasek Holdings of Singapore has raised its stake in Sorak Financial, which owns slightly more than 56 percent of BII, to 75 percent from 50 percent.The composite index closed up 20.70 points or 0.7 percent at 2,810.96, surpassing the previous all-time high of 2,795.40 set on December 6.Volume was 4.57 billion shares worth 4.76 trillion rupiah.The LQ45 index was up 4.65 points at 621.13.Gainers led decliners 125 to 57, while 63 stocks were unchanged.The rupiah was trading at 9,275/9,280 to the dollar against 9,265/9,270 late Monday.'What investors really want to know tomorrow is whether or not the Fed will cut the rate by more than 25 basis points,' said Darmawan Halim, an analyst at Amcapital Securities.Even with the index's record-breaking run, some investors were actually not actively trading today as they would rather wait until the Fed has made its decision, he said.Bumi Resources rose 150 rupiah or 2.5 percent to 6,050 rupiah while rival Bukit Asam added 200 or 1.7 percent to 12,100 rupiah.Samuel Securities said Tuesday it has raised its target price for Bukit Asam to 14,400 rupiah per share from 11,000 rupiah as it revised upward its coal price assumption and earnings estimate for 2008 and 2009.BII gained 15 rupiah or 5.5 percent to 290 rupiah. 'The question is what Temasek is going to do with its stake now,' Halim said.Temasek, which also has a 59.1 percent stake in Indonesia's fifth largest bank, PT Bank Danamon, has until the end of this month to decide whether it will merge Danamon and BII or divest its stake in either bank to comply with regulations that disallow holding controlling stakes in more than one bank.It can also set up a holding company for the two banks.'It is less likely now but still possible that Temasek may sell its BII stake to Kookmin Bank,' Halim said. The South Korean bank now holds the remaining 25 percent stake in Sorak.Among other gainers, Berlian Laju Tanker, the world's third largest chemical shipping operator, gained 125 rupiah or 5.1 percent to 2,600 rupiah after UBS raised its target price for the stock by 28 percent.The revision was to factor in the expected consolidation of recently-acquired Chembulk Tankers, UBS said.Bucking the trend, auto giant Astra International lost 750 rupiah or 2.6 percent to 27,750 rupiah on profit-taking after yesterday's record-breaking rally.(1 US dollar = 9,272 rupiah)aloysius.bhui@thomson.comalo/zrab/zr/ab/zrCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Indonesian shares close at fresh high on Wall St rise, BI rate cut 