Rupiah sinks to 15,000 and stock prices slide<\/p>\n
JAKARTA (JP): The rupiah sank yesterday past the 15,000 level
\nto the U.S. dollar, and stock prices dipped 2.3 percent over
\nprofit taking after a week of gains.<\/p>\n
Currency dealers and stockbrokers said the market lacked any
\nincentives at a time of political infighting, violence in some
\nparts of the country and continued economic turmoil.<\/p>\n
Dealers said the main cause of the rupiah's slide was heavy
\ndollar buying offshore as the market was still concerned with
\nnews about secessionist disturbances in Irian Jaya and rioting in
\nthe usually sleepy wood-carving town of Jepara in Central Java.<\/p>\n
In addition, state banks, which sold the rupiah for dollars on
\nTuesday, were still bidding for dollars in the morning which
\nfurther pushed down the rupiah.<\/p>\n
"I don't know what really has been driving the rupiah down
\nthese past two days. One possible answer is the continuing rupiah
\nselling by some state banks," a dealer with a local private bank
\nsaid.<\/p>\n
The rupiah opened the day at 14,700 and weakened to pass the
\n15,000 level in the morning before closing at 14,900. The
\ncurrency closed at 14,700 on Tuesday and 14,500 last Friday.<\/p>\n
Dealers said trading was still lackluster as many operators
\nwere taking a wait-and-see attitude amid heightening domestic
\npolitical infighting, especially inside the ruling Golkar
\nfunctional group ahead of its extraordinary convention to choose
\na new chairman.<\/p>\n
Meanwhile, stock trading on the Jakarta Stock Exchange (JSX)
\nremained active yesterday, with most investors selling their
\nholdings to cash in profits, stockbrokers said.<\/p>\n
In the morning, some investors still continued buying in
\nstate-owned companies to benefit from future gains. However,
\nselling suddenly took over the market which pushed down the main
\nprice index.<\/p>\n
The JSX Composite Index closed 10.965 points lower at 472.980,
\nwith total turnover of 224.03 million shares valued at Rp 303.91
\nbillion (US$20.26 million).<\/p>\n
Harita Kencana Securities' head of research Karman
\nPamurahardjo said: "It's total profit-taking after a sharp rice
\nin stock prices during the past week."<\/p>\n
Besides, he said the market was hit by news that the country's
\ngross domestic products contracted by 12.3 percent in the first
\nhalf of this year compared to the same period of last year.<\/p>\n
"That's beyond market expectations," he said.<\/p>\n
Karman said he had anticipated such a drop in the main price
\nindex after learning that the market had been overbought during
\nthe last few days.<\/p>\n
"The market will continue its slide in the next few days as it
\nhas been overbought, and I think investors will take a pause and
\nenjoy profits," he said.<\/p>\n
He said the country's economic and political fundamentals were
\nnot strong enough to sustain a prolonged rally.<\/p>\n
"There are so many unresolved matters and uncertainties like
\nwhat the government will do with troubled banks and when the
\nInternational Monetary Fund will disburse its loans."<\/p>\n
Nevertheless, Karman said, the market could enjoy gains again
\nwhen the government unveiled potential investors for publicly
\nlisted state firms like tin miner PT Tambang Timah and gold and
\nnickel miner PT Aneka Tambang.<\/p>\n
The market ignored rumors that the government and a foreign
\ncompany may soon close a deal on privatizing Aneka Tambang.<\/p>\n
Aneka Tambang slid Rp 100 to close at Rp 1,950, while Tambang
\nTimah gained Rp 75 to end at Rp 7,600.<\/p>\n
Last week Semen Gresik led the market rally following news
\nthat international bidders had offered the government a much
\nhigher price than expected for its stake in the cement maker.<\/p>\n
The government announced at the weekend that it had selected
\nMexico's Cementos Mexicanos SA de CV (Cemex) as the preferred
\nbidder after it offered to buy 35 percent of the government stake
\nin Semen Gresik at $1.38 per share.<\/p>\n
Stocks in Semen Gresik, which rose Rp 3,200 on Tuesday, slid
\nRp 350 to Rp 12,000.<\/p>\n
Heavyweight state-owned domestic telephone monopoly PT Telkom
\ndipped Rp 25 to close at Rp 4,350, while state-owned satellite
\noperator PT Indosat remained unchanged at Rp 17,800.<\/p>\n
Cigarette giant PT Gudang Garang dropped Rp 525 to Rp 9,275
\nand competitor PT HM Sampoerna slid Rp 100 to Rp 2,325. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-sinks-to-15000-and-stock-prices-slide-1447893297",
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