Singapore stocks recover as Jakarta holds steady

Singapore shares edged up on Wednesday from their lowest close in six weeks, as a rebound in recently-battered Jakarta stocks helped trigger bargain hunting in shares of companies with assets in Indonesia.
Singapore's Straits Times Index was up 0.24 percent, Jakarta index held steady, up 0.32 percent, and Thai shares were flat, just 0.15 percent higher. Bucking the trend, the Philippines indexes lost 0.75 percent.
Malaysia's stock market was closed for the National Day holiday, resuming trade on Thursday. Jardine Cycle and Carriage, which drew 90 percent of its first half 2005 earnings from 50.09 percent-owned Indonesian conglomerate Astray International, rose 1.8 percent after a near 6 percent decline this week.
Other companies of the Jardine group also recovered some of their recent losses with Jardine Strategic up 1.9 percent and Jardine Matheson up 1.2 percent.
Among top index movers in Singapore were property stocks such as CapitaLand Ltd, up 2.2 percent, and Keppel Land, which rose 2.4 percent. Dealers said wealthy Indonesians are buyers and stakeholders of some of Singapore's prime properties, making the sector vulnerable to vagaries in Indonesian economy and politics.
Lingering worries about stability in Indonesia, however, kept some Singapore blue chips under pressure. Southeast Asia's top telecom, Singapore Telecommunications fell 0.8 percent after the company told analysts on Tuesday the current weakening of the Indonesian rupiah is likely to affect second-quarter 2006 earnings.
Single's Indonesian associate, Telkomsel, contributed 16 percent to its bottom line and made up 44 percent of total associates' net profit contribution in the last quarter. Still, analysts such as Winston Liew of OCBC Investment Research said single's downside was limited.
"First, single is still trading below our valuation of S$2.88," Liew said. "Second, Telkomsel's contribution to single is only 16 percent and it is highly unlikely that there will be a total wipe-out on its earnings.
Third, it is unsure if the declining trend in the rupiah will sustain." In Jakarta, Astral International rose 2.5 percent and Inducement rose 5.4 percent.