Rupiah falls again but stock prices gain ground<\/p>\n
JAKARTA (JP): The rupiah remained weak against the U.S. dollar
\nyesterday, but Jakarta share prices increased slightly in a
\ntechnical rebound, analysts said.<\/p>\n
Foreign exchange dealers said the further weakening of the
\nrupiah was triggered by falls in the Singapore dollar and
\nMalaysian ringgit.<\/p>\n
They said spot rupiah, which opened at 2,610\/2,620 against the
\ndollar, was knocked down to 2,655 by midday before it stabilized
\nin the afternoon and closed at 2,640\/2,643.<\/p>\n
Share prices on the Jakarta Stock Exchange rose 0.7 percent,
\nwith composite index closing 4.77 points firmer to 662.94
\nyesterday.<\/p>\n
Total turnover was 296.01 million shares worth Rp 503.85
\nbillion (US$194.53 million) changing hand on the regular market
\nyesterday.<\/p>\n
Securities analysts said yesterday's rise in stock prices was
\njust a technical bounce after a sharp plunge in the past few
\ndays.<\/p>\n
"I think it is just a technical rebound after the market saw a
\nsharp plunge since early August," an analyst said.<\/p>\n
Trimegah Securities' head of research, David Chang, said a
\nwave to pick up big-capitalized stocks, including PT Telkom,
\nhelped activate market sentiment yesterday.<\/p>\n
"Investors are starting to pick up good quality stocks which
\nare already cheap in the market," Chang said.<\/p>\n
He said share prices on the Jakarta Stock Exchange were the
\ncheapest in the region.<\/p>\n
But he warned that regional currency volatility and the
\nweakening rupiah would remain a big concern for investors.<\/p>\n
"I think most investors are still worried about the prospect
\nof rupiah and other regional currencies," Chang said.<\/p>\n
Foreign investors would not enter the market until they saw a
\nclear direction for the rupiah, a dealer said.<\/p>\n
"While the rupiah is not stabilized, the stock market will not
\nchange much in the coming months," he said.<\/p>\n
One foreign exchange bank's chief dealer said the weakening of
\nthe rupiah was due to a drastic drop in the Singapore dollar,
\nwhich fell through the psychological 1.50 to the U.S. dollar
\nlevel to hit a new three-year low of 1.5085.<\/p>\n
This followed comments by a Monetary Authority of Singapore
\nofficial that the Singapore dollar's level was appropriate to
\nwhat was happening in the market.<\/p>\n
"I hope no one in Indonesia's monetary authority will comment
\non the rupiah this time because it will just worsen the
\nsituation," the chief dealer said.<\/p>\n
Dealers said Bank Indonesia, the central bank, was not seen
\nintervening in the market although the rupiah fell off the range
\nthe central bank had said it was comfortable with, between 2,550
\nand 2,610.<\/p>\n
A dealer with another foreign exchange bank said the rupiah
\nwould continue to weaken because many local investors exposed to
\ndollar debts had an open position on the dollar.<\/p>\n
"They want to hedge their position at 2,550 level. But I would
\nsay it is impossible to reach that level given the current
\nsituation," he said.<\/p>\n
The central bank kept its rates of bilateral central bank
\ncertificates (SBI) unchanged and continued to be absent from the
\nshort-term securities (SBPUs) market.<\/p>\n
Dealers said artificially high central bank short-term rates
\nwere likely to continue as the foreign exchange market remained
\nvolatile.<\/p>\n
The central bank kept its intervention band at 2,378\/2,682 but
\nraised the conversion band to 2,616\/2,664 yesterday from
\n2,588\/2,636 Monday. (aly\/rid)<\/p>",
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