Rupiah, index entering consolodation period: Analysts<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Analysts expect the rupiah and the Jakarta Composite Index to
\nmove within a narrow range this week, as the currency and the
\nstock market consolidate while awaiting fresh stimulus.<\/p>\n
Farial Anwar, currency analyst at the Currency Management
\nGroup, said a lack of stimulus to drive the market would
\ntemporarily stall the rupiah's upward movement, although the
\noverall sentiment would remain relatively positive.<\/p>\n
\"The market is currently losing its drive, and the local unit
\nwill stabilize in the familiar range of between Rp 9,200 and Rp
\n9,400 this week,\" Farial told The Jakarta Post over the weekend.<\/p>\n
Last week, the local unit closed lower at Rp 9,350 against the
\nAmerican dollar, compared to Rp 9,300 the previous week.<\/p>\n
Farial noted, however, that should the government manage to
\nmaintain the positive sentiment in the currency, as it had over
\nthe past couple of months, the rupiah still had a good chance to
\nstrengthen further.<\/p>\n
Since the beginning of the year, the government has succeeded
\nin creating positive sentiments among market players by
\nsuccessfully achieving a number of economic reform targets.<\/p>\n
The smooth sale of Bank Central Asia (BCA), coupled with the
\ngovernment's success in reaching a debt rescheduling deal with
\nforeign creditors grouped in the Paris Club, demonstrated to
\ninvestors the government's commitment to economic reform.<\/p>\n
This has helped revive investor confidence in the country,
\nmoving them to reenter the country. The strengthening of the
\nrupiah over the past several months has been partly ascribed to
\nthis capital inflow.<\/p>\n
The local currency has appreciated by 10 percent from its
\nvalue in January.<\/p>\n
Farial was optimistic the rupiah would continue to gain ground
\non the dollar if the government was consistent in implementing
\nits economic reform programs, including the divestment of
\nownership in several banks and the privatization of state-owned
\nenterprises.<\/p>\n
Bank Niaga is currently being offered to investors in a
\ndivestment process the government hopes to finalize by June. The
\nsales of Bank Internasional Indonesia (BII), Bank Lippo and Bank
\nDanamon are next on the list.<\/p>\n
The government also plans to sell off its majority stake in
\nIndosat, the publicly listed international phone operator.<\/p>\n
\"If these plans can be carried out on schedule, it would be
\npositive for the rupiah,\" Farial added.<\/p>\n
A dealer at a local brokerage said there was currently a lack
\nof positive news to ignite the market, but added that the rupiah
\nwould not be under pressure because of the absence of bad news.<\/p>\n
\"There is no bad news at the moment that could really put
\npressure on the rupiah. So the rupiah will not change much this
\nweek,\" he said over the weekend.<\/p>\n
Looking at the coming week for the stock market, a slight
\ncorrection is expected this week, but any movement should be
\nlimited in a narrow range, said stock analysts.<\/p>\n
David Chang, a director of Vickers Ballas, told the Post that
\nthe index would likely go down a bit on fears of higher inflation
\nbecause of the recent hike in fuel prices.<\/p>\n
\"It (the index) is going to consolidate and cool down for this
\nweek,\" David said.<\/p>\n
The index rose 0.8 percent last week to close at 544.083
\npoints, from 539.96 the previous week.<\/p>\n
Daily volume averaged 873.03 million shares valued at Rp
\n464.64 billion (US$50 million), compared to the previous week's
\n1.34 billion shares worth Rp 676.8 billion.<\/p>\n
David said that after rising sharply since the beginning of
\nthe year, the index would eventually run out of steam, making a
\ncorrection inevitable.<\/p>\n
\"It's time for (the index) to consolidate,\" he said.<\/p>\n
Just as the rupiah, the stock market has been enjoying active
\ntrading for the last several months, during which time the index
\njumped by some 40 percent.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-index-entering-consolodation-period-analysts-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}