Rupiah ends up on offshore investment inflows<\/p>\n
Dow Jones, Jakarta<\/p>\n
The rupiah ended slightly up on Friday on inflows of investment
\ncapital from overseas, dealers said.<\/p>\n
The dollar closed at Rp 10,223 versus Rp 10,229 on Thursday.<\/p>\n
Offshore investors poured dollars into the Indonesian currency
\nmarket on Friday ahead of expected initial public offerings on
\nthe Jakarta Stock Exchange and after the sale of the government's
\n5 percent sale in PT Bank Central Asia (BCA) on Wednesday for
\nUS$215 million, traders said. Foreign investors bought the bulk
\nof the bank's shares.<\/p>\n
"I think basically the market fell off on the dollar, with
\nplayers expecting money coming in for some IPOs and government
\ninvestment projects," a dealer at a foreign bank said.<\/p>\n
"There was also a lot of (dollar) selling from offshore and
\nmoney from the BCA sale coming in."<\/p>\n
But traders warned the rupiah's strength may be short-lived
\ndue to routine month-end dollar purchases by local corporate to
\nservice offshore debt obligations.<\/p>\n
The rupiah may also come under pressure from the potential
\nimpact in the U.S. of Hurricane Rita, which is poised to hammer
\nthe Louisiana and Texas coasts.<\/p>\n
"If the dollar strengthens due to less serious hurricane
\ndamage, the rupiah will likely slip (against the greenback) next
\nweek," a dealer said.<\/p>\n
Dealers expect the dollar to trade between Rp 10,200 and Rp
\n10,300 on Monday.<\/p>\n
Elsewhere, shares ended lower for the fourth consecutive
\nsession on Friday led by further selling in bank blue chips, amid
\nexpectations of poor 2005 earnings on high interest rates,
\ndealers said.<\/p>\n
Overall sentiment remains weak and cautious, with many
\ninvestors staying on the sidelines, worried over a possible fall
\nin U.S. markets later on Friday in the wake of Hurricane Rita.<\/p>\n
On the domestic front, lingering concern over growing public
\nresistance against fuel prices hikes early next month and the
\nbird flu outbreak in the capital also added to negative
\nsentiment.<\/p>\n
"These negative factors continue to depress investors," said a
\ntrader with a foreign securities firm. He added that sporadic
\nbargain hunting by local institutional funds helped the main
\nindex to stay above the important level of 1000.<\/p>\n
The Jakarta Stock Exchange Composite index ended down 0.4
\npercent, or 3.907 points, at 1012.851.<\/p>\n
Decliners led gainers 54 to 48, with 74 stocks unchanged.<\/p>\n
Volume was one billion shares valued at Rp 1.1 trillion,
\ncompared with 2.1 billion shares valued at Rp 3.7 trillion
\nThursday. The higher trade volume on Thursday was due to the
\ninclusion of a block sale of the government's 5.02 percent stake
\nin BCA.<\/p>\n
Dealers said investors continued to sell bank stocks on
\nexpectations of poor 2005 earnings on high interest rates and
\ntax.<\/p>\n
The high rate could reduce the banks' net interest margins and
\nwill push up credit costs for consumers, analysts said.<\/p>\n
Indonesian banks -- which have been exempt from paying taxes
\nsince the 1997-1998 financial crisis -- have to pay 30 percent
\ntax on their gross profits from the beginning of this year.<\/p>\n
Dealers said they expect shares to trade slightly higher on
\nMonday led by further bargain hunting in telecommunication blue
\nchips.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-ends-up-on-offshore-investment-inflows-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}