Rupiah slips to 8,700 mark on political apprehension<\/p>\n
JAKARTA (JP): Mounting tension ahead of the People's
\nConsultative Assembly (MPR) meeting next week piled pressure on
\nthe rupiah, which careened through the 8,500 psychological
\nbarrier to 8,700 against the greenback.<\/p>\n
Share prices in the local market surged 3.2 percent as most
\nforeign investors took advantage of a weakening rupiah to place
\nspeculative buying orders on telecommunication and mining stocks,
\nbrokers said.<\/p>\n
Currency dealers said the rupiah, which opened at 7,900,
\ncontinued to decline to touch an intraday high of 8,700 in the
\nJakarta spot market as dollar demand ahead of the MPR's session
\nnext week continued to increase.<\/p>\n
\"We have seen quite a huge dollar demand by domestic banks,\" a
\nchief dealer with a joint venture bank said.<\/p>\n
After learning that local banks placed large dollar demands,
\noffshore participants followed suit, pushing the rupiah near the
\n9,000 level, the dealer said.<\/p>\n
It eventually closed at 8,450 in the Jakarta spot market --
\ncompared to Monday's close of 8,050 -- as several state banks
\nstepped in to sell dollars to escape the 9,000 mark.<\/p>\n
\"If state banks did not guard the rupiah, the unit could have
\nbroken the 9,000 level on Tuesday,\" the dealer said.<\/p>\n
The special meeting of 1,000 members of the Assembly will
\nconvene from Nov. 10 to No. 13 to determine the date for a
\ngeneral election and pass the new electoral law.<\/p>\n
Analysts expect a smooth session next week, but market
\nparticipants fear a widespread riot on the scale of the May riots
\ncould reoccur.<\/p>\n
\"I think the heated fear on the political climate at home was
\nthe main factor behind the rupiah's fall on Tuesday,\" another
\ndealer, pointing out that other currencies in the region,
\nespecially the Japanese yen, ended firmer at around 115 to the
\ndollar on Tuesday.<\/p>\n
Unlike the faltering rupiah, stock prices closed up 3.2
\npercent (9.98 points) at 317.18 on total turnover of 235.20
\nmillion shares valued at Rp 309.14 billion (US$36.36 million).<\/p>\n
Gainers led losers by 52 to 18 with 72 stocks unchanged.<\/p>\n
Stockbrokers said the 3 percent increase in stock prices was
\nin line with the rise in other regional equity markets amid
\nmarket expectation of lowered interest rates in the coming weeks.<\/p>\n
\"Though lingering fears over political stability still remain,
\nbullish sentiment in regional markets helped the local market to
\nrise,\" head of research of Sigma Batara Fadjar Limin Sutandi
\nsaid.<\/p>\n
A broker with Trimegah Securindolestari said market
\nexpectation of a further interest rate cut by the U.S. Federal
\nReserve in the second week of this month had revived sentiment in
\nthe local and regional equity market.<\/p>\n
\"But the general tone in our market is still cautious
\nespecially in the leadup to the special session of the Assembly,\"
\nsaid Fitri Murniati, an analyst with BNI Securitie.<\/p>\n
Analysts and brokers said that they expected a smooth Assembly
\nsession because violence and riots would not only detract from
\nthe country's efforts to improve its economic condition, but also
\ndampen investor sentiment in the local battered market.<\/p>\n
Brokers said most blue-chip stocks, especially of
\ntelecommunication and mining stocks, were the investors' main
\nbuying targets on Tuesday. PT Telkom rose by Rp 150 to Rp 2,175
\non a total turnover of 20.67 million shares, mining firm Tambang
\nTimah by Rp 475 to Rp 4,925 on 1.05 million shares and PT Aneka
\nTambang by 25 to Rp 1,375 on 23.42 million shares. (aly)<\/p>",
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