Rupiah extends gains as stocks continue to fall<\/p>\n
JAKARTA (JP): The Indonesian rupiah extended gains yesterday
\namid optimism about the country's efforts to clean up its banks,
\nwhile local stock prices continued to fall, tracking a regional
\nweakness.<\/p>\n
Currency dealers said that unlike in recent months, the
\nforeign exchange market was no longer jittery in the face of
\nrumors or even threats of unrest, such as that posed by the
\ncurrent Indonesian Democratic Party (PDI) congress in Palu.<\/p>\n
"The fate of the rupiah currently rests with the market
\nprinciple of supply and demand. The market is bullish on the
\nrupiah on expectation of more official funds flowing into the
\ncountry," a dealer with a local private bank said.<\/p>\n
The rupiah rose to 11,000 against the U.S. dollar in morning
\ntrade before closing at 11,175, much stronger than Monday's close
\nof 11,650.<\/p>\n
Dealers said the government move last weekend to suspend the
\noperations of three sick banks and take over the shareholdings of
\nfour others had gained market support.<\/p>\n
In addition, the market was also pleased with the Armed
\nForces' move to discharge former president Soeharto's son-in-law
\nLt. Gen. Prabowo Subianto to punish him for his role in the
\nabduction and torture of political activists.<\/p>\n
"Those moves prove that the government and the military are
\nserious in their efforts to regain market confidence," the dealer
\nsaid.<\/p>\n
However, the local stock market continued to suffer from
\nregional bearishness, record high banking deposit rates and
\narbitrage selling on dual-listed stocks yesterday.<\/p>\n
The Jakarta Stock Exchange Composite Index fell 3.402 points
\nto close at 367.143 with a turnover of 247.25 million shares
\nworth Rp 310.43 billion.<\/p>\n
Edwin Syahruzad, a stock analyst at Pentasena Securities, said
\nboth the short-term and long-term outlooks for the local market
\nremained gloomy because high interest rates appeared set to
\nremain in place for a long time.<\/p>\n
He said that many local and foreign investors had moved their
\nfunds from the equity market to one-month Bank Indonesia (BI)
\npromissory notes (SBIs) which offer rates of 70 percent per
\nannum.<\/p>\n
"SBIs have attracted the attention of investors because they
\ncarry no risk," Edwin said.<\/p>\n
A broker with Trimegah Securindo Lestari said that trading
\nactivities remained sluggish because foreign investors had not
\nyet returned to the battered local market in any strength.<\/p>\n
In addition, he said they were greatly concerned over
\nrevisions to the government's plan to privatize state
\nenterprises.<\/p>\n
The broker said that although stock prices for some state
\ncompanies were relatively cheap, foreign investors were not
\ninterested because they feared the government might backtrack yet
\nagain.<\/p>\n
Shares in heavyweight state telephone company PT Telkom slid
\nRp 25 to Rp 2,775 with 14.58 million shares traded and shares in
\nthe state international call operator PT Indosat dropped Rp 475
\nto Rp 8,925 on 460,500 shares traded.<\/p>\n
State tin mining company PT Tambang Timah shares fell Rp 250
\nto Rp 6,025 on 736,500 shares traded, but state cement
\nmanufacturer PT Semen Gresik gained Rp 1,050 to Rp 7,100 on 3.71
\nmillion shares traded.<\/p>\n
Shares in cigarette giant PT Gudang Garam slid Rp 25 to Rp
\n8,400 on 841,000 shares traded, while shares in competitor PT HM
\nSampoerna rose Rp 50 to Rp 2,425 on 7.9 million shares traded.
\n(aly\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-extends-gains-as-stocks-continue-to-fall-1447893297",
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"sponsor": "Okusi Associates",
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