Rupiah fails to breach 11,000 level against dollar<\/p>\n
JAKARTA (JP): The rupiah ended slightly lower against the U.S.
\ndollar in quiet dealing yesterday, failing to breach the
\npsychological 11,000 level due to dollar-buying orders by
\noffshore operators, currency dealers said.<\/p>\n
The negative sentiment in the rupiah affected the local stock
\nmarket with stock prices falling 1.6 percent on sustained selling
\norders on certain large-capitalized stocks.<\/p>\n
The rupiah, which opened weaker at 11,200 against the American
\ndollar, closed at 11,200\/11,250 yesterday, slightly lower than
\nWednesday's close of 11,100.<\/p>\n
Dealers said that positive sentiment on the International
\nMonetary Fund (IMF)'s plan to immediately release its most-needed
\nbail-out funds for the country, did not last long as the market
\nhad discounted it.<\/p>\n
\"Positive sentiment on the IMF loan was eaten up by massive
\ndollar-buying orders by offshore operators,\" a chief dealer with
\na local private bank said.<\/p>\n
He said that offshore operators, especially in Singapore,
\nplaced whopping dollar-buying orders yesterday to benefit from
\nnegative sentiment on the country's social and political
\nfronts.<\/p>\n
News reports that angry mobs looted shops for food for a
\nsecond day in Wonosobo, Central Java, despite local police
\nwarnings, drove the rupiah down further.<\/p>\n
\"News like this has really killed the buoyant sentiment on the
\nrupiah of the past few days,\" the dealer said.<\/p>\n
Dealers said that even though state banks continued to sell
\ndollars for rupiah in a range of between US$30 million to $50
\nmillion, this failed to prop up the rupiah against the American
\ndollar.<\/p>\n
Dealers said that rupiah's outlook for the rest of the week
\nwould remain volatile because of more downward pressure coming
\nfrom the domestic political situation and regional bearishness.<\/p>\n
The Jakarta Stock Exchange (JSX) fell 1.6 percent as
\npersistent selling pressures on blue chip stocks continued to be
\nweighed down by regional bearishness, stock brokers said.<\/p>\n
The JSX Composite Index closed 5.98 points lower to a seven-
\nmonth low of 354.945 on a total turnover of 122 million shares
\nchanging hands valued at Rp 223 billion (US$19.23 million).<\/p>\n
Losers led gainers 65 to 22, with 75 stocks unchanged and 126
\nuntraded.<\/p>\n
Associate director of the state-owned securities house Bahana
\nSecurities Andre Cita said that concerns over the inconsistency
\nof the government's privatization plan also upset many foreign
\ninvestors.<\/p>\n
\"Investors are worried that the government will not be able to
\ncarry out its privatization program for this fiscal year,\" he
\nsaid.<\/p>\n
In spite of this, state-owned cement producer Semen Gresik
\nended Rp 675 higher at Rp 7,875 on 5.3 million shares traded on
\nthe positive reaction that Mexico's Cemex SA, which is currently
\nholding talks with the government to buy a 14 percent stake in
\nthe cement company, would buy more shares on the open market.<\/p>\n
Cemex had won the first bidding stage to buy up to 51 percent
\nof Semen Gresik. The government, however, changed its divestment
\nplan for the cement producer due to public opposition.<\/p>\n
Shares of international call operator PT Indosat dropped Rp
\n625 to Rp 7,975 and tin mining firm PT Tambang Timah's shares
\nalso shed Rp 225 to Rp 5,775 on 65,000 shares traded.<\/p>\n
Brokers also attributed the fall in stock prices to a change
\nof investors' investment pattern from the equity market to the
\nmoney market to benefit from a higher yield in Bank Indonesia's
\none-month promissory notes.<\/p>\n
\"With an interest rate of 70 percent, some investors prefer to
\nput their funds in BI's one-month promissory notes than in the
\nstock market,\" a broker with Mashill Jaya Securities said. (aly)<\/p>",
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