Rupiah ends higher as foreigners sell dollars<\/p>\n
Dow Jones
\nJakarta<\/p>\n
The rupiah continued recovering on Wednesday as foreign investors
\nexchanged dollars to settle their recent purchases of local
\nbonds, dealers said.<\/p>\n
The dollar dipped briefly below the Rp 10,000 mark earlier in
\nthe day, touching Rp 9,990. It was the dollar's lowest level
\nsince Aug. 22. The greenback ended at Rp 10,005 versus its close
\non Tuesday at Rp 10,075.<\/p>\n
"The dollar's dip below Rp 10,000 could be an early signal
\nthat the rupiah crisis is over," a dealer with a foreign bank
\nsaid. "It most likely will try to make a clean break below Rp
\n10,000 tomorrow."<\/p>\n
Foreign investors came in large numbers recently, snapping up
\nundervalued government bonds after the government and the central
\nbank took steps to support the rupiah, including raising interest
\nrates and making plans to cut fuel subsidies.<\/p>\n
Dealers, however, said profit-taking drove bonds prices
\nslightly lower on Wednesday. Still, they expect the profit-taking
\nto ease in the coming days.<\/p>\n
Dealers expect the dollar to trade between Rp 9,990 and
\nRp 10,020 on Thursday.<\/p>\n
Meanwhile, the shares ended sharply lower on Wednesday, led by
\nselling in bellwether Telekomunikasi Indonesia (Telkom) on
\nrenewed expectations that its 2005 earnings will be eroded by
\nforeign exchange losses brought about by the weak rupiah, dealers
\nsaid.<\/p>\n
They said news that the government will likely hike fuel
\nprices significantly early next month continued to discourage
\ninvestors, as it could push up the operating costs of many
\nIndonesian companies, hurting their 2005 earnings.<\/p>\n
"Investors also fear the fuel price hikes could spur students
\nand other people to stage demonstration," said a trader with a
\nlocal securities firm.<\/p>\n
The Jakarta Stock Exchange Composite index ended down 2.5
\npercent, or 27.117 points, at 1058.627.<\/p>\n
Decliners led gainers 98 to 25, with 70 stocks unchanged.<\/p>\n
Volume fell to 1.25 billion shares valued at Rp 1.2 trillion,
\ncompared with 1.4 billion shares valued at Rp 1.3 trillion on
\nTuesday.<\/p>\n
Telkom fell 4.7 percent to Rp 5,050, on expectations it will
\nbook a lower net profit for 2005 on increased foreign exchange
\nlosses. Telkom has debts of around US$750 million, analysts said.<\/p>\n
Dealers said worries over fuel price increases also hit
\nautomotive company Astra International, which lost 3.6 percent to
\nend at Rp 10,650, and consumer goods producer Unilever Indonesia,
\nwhich ended down 5.6 percent at Rp 3,825.<\/p>\n
Shares in nickel miner International Nickel Indonesia, or
\nInco, bucked the trend, rising 1 percent to Rp 14,600 on bargain
\nhunting after recent falls from profit taking.<\/p>\n
Dealers said they expect shares to trade slightly higher
\nThursday on bargain hunting following a drop of 4.3 percent on
\nthe main index over the previous two sessions.<\/p>",
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"sponsor": "Okusi Associates",
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