Rupiah stable but local stocks fall 5.5%<\/p>\n
JAKARTA (JP): Local stock prices plummeted further yesterday
\nin reaction to high interest rates as the government maintained
\nits tight monetary policy to prop up the rupiah, analysts and
\ndealers said.<\/p>\n
After falling 4.75 percent last Friday, share prices on the
\nJakarta Stock Exchange tumbled again by 5.53 percent yesterday,
\nwith the composite index dropping 31.75 points to close at 542.65
\npoints.<\/p>\n
In the currency spot market, dealers said the rupiah remained
\nstable, trading at around 2,700 level against the U.S. dollar.<\/p>\n
Stockbrokers attributed yesterday's stock plunge to a blue-
\nchip sell-off triggered by high interest rates combined with
\nconcern over lower corporate earnings following the rupiah's
\nsharp depreciation.<\/p>\n
\"Most investors have switched to time deposits which offer
\nhigher margins,\" an analyst with a joint venture securities firm
\nsaid.<\/p>\n
He said the rupiah's depreciation would put pressure on
\ncorporate earnings, especially for third and fourth quarters.<\/p>\n
\"Some have even predicted foreign exchange losses and they
\nhave to make adjustments to their earnings forecasts,\" he said.<\/p>\n
Retail chain PT Matahari Putra Prima, for example, has
\npredicted a foreign exchange-related loss of Rp 39 billion
\n(US$14.4 million) this year.<\/p>\n
An analyst from Arab Malaysian Capital Indonesia Securities,
\nSetiatno Budiman, said the stock market would not recover amid a
\ntight monetary policy and high interest rates.<\/p>\n
\"While the rupiah is not yet stable and banks offer higher
\ninterest rates, don't expect the stock market to gain ground,\"
\nSetiatno said.<\/p>\n
Brokers said selling focus was on blue-chips and banking
\nstocks, but added that falls in heavyweights PT Telkom and Bank
\nNegara Indonesia (BNI) had affected the index.<\/p>\n
Losers led gainers by 112 to four, with 16 counters unchanged.
\nTotal volume was 347.8 million shares valued at Rp 459.7 billion.<\/p>\n
Banking stocks such as BNI, Bank International Indonesia, Bank
\nBali, Lippo Bank, Bank Danamon, Bank Niaga, Bank PDFCI and Bank
\nTiara were among the losers.<\/p>\n
In the currency market, the Indonesian rupiah strengthened
\nagainst the greenback in morning trading but weakened slightly in
\nlate trading despite relatively tight liquidity, dealers said.<\/p>\n
Spot rupiah, which opened at 2,685\/2,715, strengthened to
\n2,670 in morning trading but weakened in the afternoon to close
\nat 2,710\/2,720.<\/p>\n
Dealers said rupiah was heading toward its equilibrium as
\ntrading spread narrowed to 10 points yesterday from 20 points
\nlast Friday.<\/p>\n
They said some spillovers from renewed pressure on the Thai
\nbaht had kept sentiment weak on the rupiah and triggered some
\ndollar buying despite the high rates.<\/p>\n
One foreign exchange bank dealer said the market expected the
\nrupiah to strengthen in larger liquidity demand ahead of the
\nmonth's end and the maturing of the central bank's forward
\ncontracts to defend the rupiah.<\/p>\n
\"Rupiah was getting a bit liquid in the afternoon. Banks
\nstarted unlocking rupiah to buy dollar,\" the dealer said.<\/p>\n
The overnight interbank rate dropped from about 100 percent
\nlast week to 35 percent yesterday.<\/p>\n
\"I don't know where the liquidity came from, but I suspect
\nthey have been prepared in anticipating tighter liquidity today
\ndue to the maturing central bank's forward contract
\nintervention,\" he said.<\/p>\n
He added it was hard to know the actual figures for the
\ncentral bank forward intervention which was scheduled to mature
\nyesterday, but the amount would be about US$500 million.<\/p>\n
Banks might also get fresh funds from the public as some
\ninstitutional investors cashed their stocks and shifted them to
\ntime deposits as they offered higher gains with lower risk, the
\ndealer said.<\/p>\n
Although dollar buying increased late yesterday, swap margin
\nimproved. Overnight swap was recorded at 12.00\/16.00, down from
\n35\/40 points last Friday.<\/p>\n
One-week swap was down to 50\/65 from 75\/80, one-month to
\n170\/200 from 210\/215, two to 230\/280 from 265\/280, three to
\n360\/380 and six to 375\/410 points. (aly\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-stable-but-local-stocks-fall-55-1447893297",
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