Jakarta market dormant on lingering uncertainties<\/p>\n
JAKARTA (JP): The Indonesian financial markets remained
\nsluggish yesterday with the rupiah barely moving and the stock
\nmarket ending slightly higher on a lack of incentives and worries
\nover political uncertainties.<\/p>\n
Currency dealers said the rupiah touched a day low of 15,200
\nin early afternoon trading following news reports that the
\npolitical situation in East Timor was on the boil.<\/p>\n
\"East Timor has become a hotspot again, with all news wires
\nfiling extensive reports about demonstrations and instability
\nthere. The market is quite nervous,\" a dealer with a local
\nprivate bank said.<\/p>\n
The rupiah ended at 14,800 on the Jakarta market, little
\nchanged from Friday's close of 14,700.<\/p>\n
\"Nothing, but intervention, can spur the rupiah. In this very
\nthin market, even $10 million can move the market significantly,\"
\nthe dealer said.<\/p>\n
\"So, if the central bank can use some of the US$1 billion of
\nIMF money for intervention, I'm sure it will take the rupiah to
\nthe 10,000 level in a very short time, provided there are no
\nnegative developments on the political front.\"<\/p>\n
Last week, the government signed the second supplementary
\nmemorandum of economic and financial policies with the
\nInternational Monetary Fund (IMF).<\/p>\n
Under the new deal, the government and the IMF projected that
\nthe rupiah would settle by the end of the year at 10,000 to the
\ndollar.<\/p>\n
The deal was a prerequisite for the IMF to disburse $1 billion
\nin a balance of payment support loan to Indonesia. The $1 billion
\nis part of the $43 billion bailout arranged by the IMF to help
\nsalvage the country's battered economy.<\/p>\n
The stalled rupiah made stock trading on the Jakarta Stock
\nExchange (JSX) lethargic the whole day, stockbrokers said.<\/p>\n
Stock prices made a very slight gain of 0.08 percent, with the
\nJSX Composite Index closing 0.361 points higher at 431.231.
\nTurnover totaled 189.17 million shares valued at Rp 130.32
\nbillion (US$8.5 million).<\/p>\n
A broker with a local brokerage said the market was still
\ntrading thinly with even large-cap stocks like state
\ntelecommunications firm PT Telkom trading modestly.<\/p>\n
Telkom stayed unchanged to close at Rp 4,050.<\/p>\n
Bahana Securities' associate director and head of equity sales
\nAndre Cita said the market was pretty flat because most foreign
\ninvestors were watching from afar due to a lack of good news
\nhere.<\/p>\n
\"I think they're going to be sidelined for a while until we
\nget more positive news. Right now, it's pretty neutral, not much
\nbad news except for developments in East Timor,\" Cita said.<\/p>\n
It was reported at least one person was killed and five were
\nwounded in East Timor yesterday when Indonesian security forces
\nclashed with protesters demanding independence for the troubled
\nterritory.<\/p>\n
The protest was held in the town of Baucau after three
\nEuropean ambassadors arrived there as part of a review of the
\npolitical situation in the province.<\/p>\n
Cita said there were lingering concerns over East Timor which
\ncould drag down the market in the next few weeks because any
\nnegative developments in the country's youngest province could
\nfrighten away investors.<\/p>\n
He warned that political instability could stall everything,
\nincluding the implementation of the reform program agreed with
\nthe IMF.<\/p>\n
\"We hope everything will go smoothly. But even if everything
\ngoes right, it is still difficult for the country and for the
\ncitizens,\" Cita said.<\/p>\n
It needs a bit of positive news to fuel the market, which is
\nheavily burdened with a lot of uncertainties, he said. (rid)<\/p>",
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"sponsor": "Okusi Associates",
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