RI markets strengthen on regional rally<\/p>\n
JAKARTA (JP): Indonesian financial markets strengthened
\nyesterday, boosted by high expectations across the region over a
\nnew Japanese economic stimulus package designed to lift the
\nregional market.<\/p>\n
The regional market \"celebrated\" yesterday the anniversary of
\nthe start of the Asian financial crisis sparked by a de facto
\ndevaluation of the Thai baht.<\/p>\n
Currency dealers said the rupiah strengthened to 14,575
\nagainst the U.S. dollar in morning trading on the Jakarta market,
\nbut then weakened to 14,600\/700 at the close as the Japanese yen
\nslid to 140 against the dollar from 138 in the morning.<\/p>\n
The rupiah closed at 14,650\/700 on Wednesday.<\/p>\n
\"Today, the factors are totally regional. No fundamental
\nfactors come from the domestic side,\" a dealer with a local
\nforeign exchange bank said.<\/p>\n
He said the market was still quiet since demand for the dollar
\nat its current level was practically nonexistent.<\/p>\n
Dollar demand from commercial banks has diminished because
\nmost settled their offshore interbank debts and trade finance
\narrears by June 30, some with the help of Bank Indonesia.<\/p>\n
Corporate demand for dollars also eased following the
\nimplementation of the Frankfurt corporate debt arrangement this
\nmonth, which has started to provide some relief to local
\ncorporations suffering from large offshore debts.<\/p>\n
The market also anticipated the disbursement of the next US$1
\nbillion tranche from the International Monetary Fund, which will
\nbe followed by other multilateral and bilateral loans.<\/p>\n
Businesses and investors, however, were still concerned with
\nthe social and political situation. Some worried the situation
\ncould worsen since 79.4 million people already lived below the
\npoverty line.<\/p>\n
Nevertheless, the strengthening of the rupiah and the regional
\nrally boosted share trading on the Jakarta Stock Exchange (JSX)
\nfor a third consecutive day.<\/p>\n
Share prices closed 2.2 percent higher, with the JSX Composite
\nIndex rising 9.832 points to 466.373.<\/p>\n
Trading turnover totaled 438.57 million shares valued at Rp
\n399.35 (US$27.2 million).<\/p>\n
Dealers said some buying was in anticipation of an
\nannouncement by the Japanese government that it would stimulate
\nits economy and clean up its banking system, a move expected to
\ngive a boost to regional currencies, especially the Japanese yen.<\/p>\n
Socgen-Crosby Indonesia's head of research, Goei Siauw Hong,
\nsaid the rise on the local benchmark index was a kind of
\ntechnical rebound since it was all supported by foreign buying.<\/p>\n
\"All regional markets were on the rise today. It seems to me
\nthere was a great buying program for Asia following the
\nstrengthening of the yen,\" he said.<\/p>\n
Fresh foreign funds coming into the market this week have
\ncountered the prevailing bearish trend, leading domestic
\ninvestors back into the market.<\/p>\n
Hong, however, warned that the euphoria in the local market
\ncould be short-lived since the fundamentals of the Indonesian
\neconomy had not changed very much.<\/p>\n
\"The longer-term outlook is still gloomy. The trend shows a
\ndecline,\" he said.<\/p>\n
Most large-cap stocks continued to book gains yesterday, with
\nheavyweight domestic telephone firm PT Telkom rising Rp 150 to Rp
\n4,350 with 7.6 million shares traded.<\/p>\n
Cigarettemaker PT Gudang Garam closed Rp 500 higher at Rp
\n9,650 on 1.6 million shares traded, while competitor PT HM
\nSampoerna rose Rp 175 to Rp 2,350 on 17.3 million shares.<\/p>\n
Some stockbrokers, however, warned that the benchmark index
\nmay come off its highs today ahead of the long weekend with
\ndomestic investors cashing in on their profits.<\/p>\n
Indonesian financial markets will be closed Monday for a
\npublic holiday. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-markets-strengthen-on-regional-rally-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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