Price rally continues on JSX, but rupiah down<\/p>\n
JAKARTA (JP): The price rally continued on the Jakarta Stock
\nExchange on Friday, with the benchmark Composite Index again
\nbreaking the 700-point psychological barrier.<\/p>\n
The rupiah weakened on Friday to close the day at Rp 7,295
\nagainst the U.S. dollar, down from Rp 7,280 late Thursday despite
\nthe surge in share prices.<\/p>\n
The dollar traded in a very narrow range between Rp 7,295 and
\nRp 7,250 during the day.<\/p>\n
Securities analysts attributed the bullish trading to a
\nfurther decline in interest rates at local banks and an
\nimprovement in the buying mood in regional markets.<\/p>\n
The Jakarta Composite Index rose 3.9 percent, or 26.84 points,
\nto close the week at 707.88 in active trading.<\/p>\n
\"The continued lowering of interest rates this week could
\nalready have sparked the start of a migration of people from
\ninvesting in bank deposits to equity stocks,\" the vice president
\nof PT Bakrie Finance Corporation, Dandossi Matram, said.<\/p>\n
The benchmark central bank interest rates on one-month
\ncertificates of deposit (SBI) fell on Wednesday auctions to a
\nweighted average of 22.50 percent, from 23.48 percent last week.<\/p>\n
The SBI rates, which jumped to 70 percent last year on the
\nimpact of the central bank's tight measures to cope with strong
\ninflationary pressure, started to decline only three months ago
\nfollowing an improvement in economic fundamentals.<\/p>\n
The fall in SBI rates further pushed down interest rates at
\nlocal banks to as low as 20 percent for one-month deposit.<\/p>\n
\"The indication that a considerable number of legislative
\nseats would go to reformist political parties is another factor
\nof the strengthening JSX,\" Dandossi added.<\/p>\n
He said that the index could continue to rise to the 1,000
\npoint level by end of the year, providing that the public accept
\nthe outcome of the election.<\/p>\n
\"The 1,000 point level is theoretically possible, considering
\nthe significant accumulation of inflation from the pre-crisis
\nlevel up to now,\" he said.<\/p>\n
Dandossi said market jitters over a possible rise in U.S.
\ninterest rates had subdued as investors were convinced by Federal
\nReserve Chairman Alan Greenspan that only a modest interest rate
\nincrease would be possible.<\/p>\n
Another local analyst said that, looking at the current
\ndevelopments, the share prices have the momentum for a further
\nincrease next week.<\/p>\n
This, he said, had provided a wider trading range within which
\nthe index would fluctuate.<\/p>\n
\"We now can talk about an 80 to 100-point trading range,\" he
\nsaid.<\/p>\n
The stability of the index above the 700-point level will be
\ntested by the market on Monday.<\/p>\n
\"If it passes the test we will have a new trading range that
\nspans between 700 and 780 points,\" he said, explaining that the
\nlower figure would serve as the support and the upper as the
\nresistance for trading.<\/p>\n
Last time the index breached 700, following the smooth
\nelection day, it failed to stay there and went back down to the
\n600 level.<\/p>\n
The analyst explained that within the possible new trading
\nrange, movement toward upper 780-point barrier would depend on
\nthe poll results and their acceptance by the public.<\/p>\n
\"First, general foreign investor confidence has given a green
\nlight to a bullish JSX. Second, we have good regional markets,
\nnow it is up to the internal condition of Indonesia,\" he said.<\/p>\n
Blue chip shares, along with other stocks in the second-liner,
\nsaw good gains.<\/p>\n
Cigarette-maker HM Sampoerna increased 7.2 percent, a rise of
\nRp 1,200 to Rp 19,200. Instant noodle-manufacturer Indofood
\njumped 13 percent, or Rp 1,250 to Rp 11,100. And state-owned
\nTelkom was up 3 percent, or Rp 150 to Rp 4,950.(udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/price-rally-continues-on-jsx-but-rupiah-down-1447893297",
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"sponsor": "Okusi Associates",
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