Rejuvenated rupiah may start to flag<\/p>\n
JAKARTA (JP): The rupiah, which perked up to break through the
\npsychological barrier of 9,000 against the U.S. dollar last week,
\nis expected to take a breather from its surge and most probably
\nlose ground due to selling pressure.<\/p>\n
Share prices on the local stock market are also expected to go
\nin the downward direction as last week's bullish sentiment will
\nlikely be curtailed by investor profit taking, analysts said.<\/p>\n
Positive market response to a strong rupiah last week -- which
\nsent the main index on the local market soaring by 15.8 percent
\n-- would not persist as investors started taking profits on the
\ngains, they added.<\/p>\n
\"Bullish sentiment is only short-lived as certain investors
\nwill start selling their portfolio again this week to take
\nprofits on the gains they made,\" an institutional sales broker
\nwith Trimegah Securindolestari said.<\/p>\n
Analysts said the rupiah would stabilize within the Rp 9,000
\nlevel against the U.S. dollar as the driving factor -- the
\nassumption that capital controls might be imposed -- would no
\nlonger affect the buying sentiment.<\/p>\n
Hopes that Indonesia would impose the control were dashed
\nafter Bank Indonesia Governor Sjahril Sabirin made it clear the
\nnew currency control system would be applied next year.<\/p>\n
Sjahrir said in Washington, D.C., on Thursday that the capital
\nflow monitoring system would not be introduced this year.<\/p>\n
\"It is not coming out so quickly this year. We are not in a
\nhurry. It is unlikely within the year, but it could be next
\nyear.\"<\/p>\n
Stock analysts said market speculation over the capital
\ncontrol system had unnerved offshore operators from building any
\nlong dollar positions last week, causing the rupiah to easily
\ngather steam to hover around the 9,000 level against the American
\ndollar, a level not seen since the fall of Soeharto from power in
\nMay.<\/p>\n
The rupiah closed sharply higher at 9,050 on Friday last week
\ncompared 10,775 the previous week due a speculation that the
\ngovrnment would soon impose a capital control.<\/p>\n
But stock analysts denied the rupiah's recovery reflected the
\nreturn of foreign investor confidence in the country's economy
\nbecause the poltical and economic condition remained weak.<\/p>\n
\"Indonesia has a lot of homework to do, and due to that share
\nprices will likely decline again this week,\" head of research of
\nPanin Sekuritas Anton Karlam said.<\/p>\n
Stock analysts conceded that the rupiah gain had given leeway
\nfor most Indonesian debt-ridden companies to restructure their
\ndollar-denominated debts.<\/p>\n
\"The rupiah recovery only signals hope that Indonesian
\ncompanies will have breathing space amid this crisis,\" said the
\nhead of research of Vickers Ballas Tamara, Noraya Soewarno.<\/p>\n
Anton said that certain foreign investors might continue to
\nbuy selected blue-chip stocks early this week to take advantage
\nof the more stable rupiah.<\/p>\n
\"Besides, some blue-chip stocks have been undervalued.\"<\/p>\n
But the buying spree, which started on the last trading days
\nlast week, would only last for the beginning of this week before
\ninvestors placed large selling orders due to the country's
\nvolatile market and dire economic outlook, he added.<\/p>\n
\"There are no more long-term investors in the local market.
\nThey enter the market when there is good sentiment and take
\nprofits immediately afterward.\"<\/p>\n
Tamara's Noraya said that the direction of the country's
\nmarket would entirely depend on the development of external
\nfactors as investors did not find any fresh leads from the
\ndomestic market.<\/p>\n
\"Our market rose in two days last week due to the external
\nfactors. So we will see how the global market, especially Wall
\nStreet, moves this week,\" Trimegah's broker said.<\/p>\n
The Jakarta Stock Exchange (JSX) Composite Price index closed
\n41.61 points higher to 304.84 last week from 263.22 the previous
\nweek.<\/p>\n
Total daily turnover rose to 281.14 million shares last week
\nfrom 203 million shares the previous week.<\/p>\n
Total daily transaction value also rose to Rp 259.58 billion
\nlast week compared to Rp 174.62 billion the previous week. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rejuvenated-rupiah-may-start-to-flag-1447893297",
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