Rupiah fall continues to worry investors<\/p>\n
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
\nare likely to remain weak this week as concerns over the falling
\nrupiah will continue, analysts said.<\/p>\n
The rupiah reached an historic low of Rp 3,725 against the
\nU.S. dollar before recouping at Rp 3,640\/3,650 at Friday's close.<\/p>\n
\"I think the rupiah's continuing falls are likely to keep
\nmarket sentiment bearish ... and the rupiah will remain the key
\nfactor affecting the stock market this week,\" Harita Securities
\npresident Christina Lim said over the weekend.<\/p>\n
Currency dealers attributed the continued decline in the
\nrupiah to the combination of weakening regional currencies,
\npressures from foreign fund managers and the high demand for
\ndollars from local companies.<\/p>\n
\"High demand by the Indonesian corporate sector to purchase
\ndollars will continue to cast a shadow on foreign exchange
\ntrading this week,\" a local bank dealer said last week.<\/p>\n
Stock brokers said that the worsening currency trading
\nsituation would create a bearish sentiment in local stock
\ntrading.<\/p>\n
\"The rush for dollars caused panic selling on the Jakarta
\nstock bourse last week,\" one dealer with a local brokerage house
\nsaid.<\/p>\n
The brokers estimated, however, that good shares would become
\nthe target of choosy investors despite the unfavorable condition
\nof overall trading activities.<\/p>\n
\"But the prospects for recovery will remain thin ... if not
\neven worse,\" one broker said.<\/p>\n
On Friday alone, the JSX Composite Index lost 21.45 points to
\nclose at 515.45 in thin trading with 434 million shares worth Rp
\n481 billion changing hands.<\/p>\n
\"The market seems to have lost its direction as a direct
\nimpact of the weakening rupiah,\" Lim said.<\/p>\n
Brokers also shared Lim's view saying that most investors were
\nconfused by the direction of trading activities in the Jakarta
\nbourse.<\/p>\n
Brokers said that the fact that more banks planned to increase
\ntheir deposit rates would make the stock market even less
\nattractive.<\/p>\n
\"With the rise of deposit rates, most investors would find
\nbank deposits even more tempting,\" a dealer with Asian
\nDevelopment Securities said.<\/p>\n
They said that easing the government's tight crunch policy
\nremained the key factor to boosting stock trading.<\/p>\n
Bank Indonesia's Governor Soedradjad Djiwandono last week said
\nthat the government would continue to lower the interest rates of
\nBank Indonesia certificates (SBIs) to improve economic liquidity.<\/p>\n
The JSX Composite Index lost 6.26 percent last week with the
\nindex closing 34.44 points down to 515.477.<\/p>\n
Daily turnover declined 4.3 percent to 275.02 million shares
\nchanging hands on the regular market last week compared to 286.94
\nmillion shares in the previous week.<\/p>\n
Daily value also fell 15.9 percent to Rp 357.08 billion
\n(US$108.20 million) last week against Rp 413.91 billion recorded
\nin the previous week.<\/p>\n
Securities analysts said that the main price gauge might
\nfurther go down below the 500 level in the coming weeks and would
\nnot recover to its previous high of 740 on July 7.<\/p>\n
\"In this current situation, ...nobody can do anything,\" Lim
\nsaid.<\/p>\n
Most big-capitalized stocks lost ground last week with state-
\nowned telecommunication falling by Rp 100 to Rp 3,450, HM
\nSampoerna by Rp 1,000 to Rp 5,700, Bank Internasional Indonesia
\nby Rp 200 to Rp 775, Bank Negara Indonesia by Rp 100 to Rp 800
\nand Bank Dagang Nasional Indonesia (BDNI) by Rp 100 to Rp 600.
\n(aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-fall-continues-to-worry-investors-1447893297",
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