Analysts forecast gloomy week for markets<\/p>\n
Berni K. Mustafa, The Jakarta Post, Jakarta<\/p>\n
Clouds looming over the global economy, capital outflow and
\nsecurity concerns here could see further lows experienced by the
\nrupiah and the stock index this week, analysts said over the
\nweekend.<\/p>\n
Head of fixed income research at PT Danareksa Sekuritas,
\nKhalil Rowter, said a reprieve for the rupiah was unlikely in the
\nshort term.<\/p>\n
"The market is running short of dollars, while regular dollar
\nbuyers like PLN and Pertamina continue to soak up supplies,"
\nKhalil said, referring to the country's two state energy
\ncompanies.<\/p>\n
He said the recent terrorist attacks against the U.S. had
\ndealt another blow to an already slowing U.S. economy, pushing
\nthe rest of the world to the brink of recession.<\/p>\n
This condition has made banks around the world hold back on
\ninvestment to secure short-term liquidity.<\/p>\n
"Foreign banks pile up their dollar reserves to anticipate
\nsettlements from their counterparts, mainly in the U.S," he
\nexplained.<\/p>\n
Japanese firms have also repatriated their dollars from around
\nthe world as October is the middle of Japan's fiscal year, he
\nadded.<\/p>\n
Khalil said the rupiah's decline was compounded by
\ndevelopments at home, where rising anti-foreign sentiment has
\npressured capital outflow.<\/p>\n
Anti-U.S. protests have unsettled Jakarta and other cities, as
\nthe United States gears up for war against the Taliban regime in
\nAfghanistan.<\/p>\n
Various local radical groups have threatened to expel U.S.
\ncitizens, unsettling foreign investors around the country.<\/p>\n
"When people leave the country, they take with them their
\ndollar accounts here, and so do foreign companies," he said.<\/p>\n
He said the market also expected no fresh dollar inflows given
\nthe government's indecisiveness over its privatization plans.<\/p>\n
Khalil was referring to the stalled sale of PT Semen Gresik
\nand PT Bank Central Asia (BCA), which could have stimulated the
\nmarket.<\/p>\n
He said the rupiah could easily test the 9,800 level or above
\nin the absence of fresh leads to uplift the local unit.<\/p>\n
In this week's trading, the rupiah dropped to 9,710 against
\nthe U.S. dollar from around 9,410 a week before.<\/p>\n
"What has been keeping the rupiah from falling back to the
\n10,000 level is dollar-selling by Bank Indonesia and IBRA (the
\nIndonesian Bank Restructuring Agency)," he said.<\/p>\n
He said the rupiah's direction depended on how much Bank
\nIndonesia was willing to spend on intervention and whether IBRA
\ncould push ahead with its asset sales.<\/p>\n
In the stock market, the index breached the 400 level to close
\nthe week at 392.47, as against 414.43 a week earlier.<\/p>\n
Stock analyst Ahmad Subagja at PT Niaga Securities said a drop
\nin the shares of market heavyweight PT Telkom Indonesia had led
\nto the index's dip into 300 territory.<\/p>\n
He said investors disposed Telkom shares on news of the
\ncompany's plan to undertake a right issue.<\/p>\n
For this week, Ahmad predicted that the market would remain
\nbearish with investors keeping a close eye on the anti-U.S.
\nprotests here.<\/p>\n
He said the stock market would find its support level at
\naround 375, with resistance at 400.<\/p>",
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