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Jakarta stocks end lower, Gudang Garam falls

JAKARTA: Jakarta shares closed lower on Wednesday as investors sold off cigarette stocks after on Tuesday's late rebound, especially strike-hit Gudang Garam .

The Jakarta composite index closed down 5.0 points or 0.9 percent at 564.74 points. Some 171 shares were traded, with losers leading gainers 47 to 41.

Heavyweight Gudang Garam was down 900 rupiah, or 6.7 percent, at 12,600 on 4.3 million shares traded.

"Investors sold back Gudang Garam after yesterday's late buying. Investors were still concerned over the operation halt in the company because of a strike," a dealer with a state brokerage firm said.

Tejinder Sandou, an analyst with Securities Indonesia estimated Gudang Garam still has cigarette inventory for the next two or three weeks and distribution to the retailer level should not be disrupted immediately.

"But if the operation halt continues until April 21, I think it would be a serious problem for the company," the analyst said.

Dealers said the transactions were thin as most investors waiting for the Paris Club meeting this week to reschedule $2.1 billion in debts. Optimism on the Paris Club meeting had helped Gudang Garam and other blue chips to rebound on Tuesday, but concern on the halt of operations at the company reemerged, prompting players to sell back the shares, another dealer said.

Another cigarette company, Sampoerna, was down 50 rupiah at 11,500 on 1.9 million shares traded.

"I saw foreign investors had sold Gudang Garam and Telkom. Sentiment was weak on both counters," one broker said.

Dual-listed telecoms company Telkom was down 50 rupiah, or 1.4 percent, at 3,625 after the shares closed lower overnight on Wall Street.

Dealers said falls in two heavyweights, Gudang Garam and Telkom, had weakened sentiment in most other blue chips and dragged the stock index down.

Indonesia begins two-day talks with the Paris Club later on Wednesday amid expectations that most, if not all, of $2.1 billion in foreign debt will be rescheduled.-Reuters