Rupiah stable following U.S. interest rate cut<\/p>\n
JAKARTA (JP): The rupiah remained stable against the U.S.
\ndollar on Wednesday, closing at Rp 10,750 on the Jakarta spot
\nmarket, buoyed up by a 0.25 percentage point cut in U.S. interest
\nrates, currency dealers said.<\/p>\n
Most shares in the local market remained weak due to
\nunfavorable regional conditions, but the main price index on the
\nJakarta Stock Exchange (JSX) edged up slightly after a late
\nflurry of trading in several blue chip stocks.<\/p>\n
Currency dealers said trading in the rupiah, which opened the
\nday at 10,850, was moderate because most dealers were still
\nreluctant to build new positions on it.<\/p>\n
\"The 0.25 percentage point cut in U.S. interest rates helped
\nto buoy rupiah trading,\" a chief dealer with a local private bank
\nsaid, adding that the interest rate cut merely prevented the
\nrupiah from falling against the dollar.<\/p>\n
The U.S. Federal Reserve cut interest rates by 25 basis points
\nto 5.25 percent on Tuesday, the first cut in 32 months.<\/p>\n
\"The market expected the U.S. Federal Reserve to cut interest
\nrates by 0.50 percentage points,\" the dealer added.<\/p>\n
Dealers said that political and social uncertainty, and
\nlingering street demonstrations would curtail the rupiah's
\nadvance against the U.S. dollar in the days ahead, adding that
\nthey expected the rupiah to remain above Rp 11,000 in trading.<\/p>\n
Unlike the rupiah, most stocks on the battered local market
\nended the day lower on Wednesday due to persistent selling
\npressure exerted on selected stocks by foreign investors to
\nmitigate the negative impact of bearish sentiment in the regional
\nmarkets.<\/p>\n
\"I think the fall in other regional markets is responsible for
\nthe decline in our market,\" a broker with Trimegah
\nSecurindolestari said.<\/p>\n
The JSX Composite Index, however, edged up 0.14 points to
\nclose at 276.15, with a total turnover of 157.72 million shares.
\nThe rise was attributed to a late surge in trading in blue chip
\nshares.<\/p>\n
Losers outnumbered gainers 57 to 45, with shares in 73
\ncompanies ending the day unchanged.<\/p>\n
The broker said that trading activities in the local market
\nhad remained lethargic, with most foreign investors reluctant to
\nenter the fray. The daily transaction value on the market now
\nusually hovers at around Rp 150 billion, compared to the pre-
\ncrisis level of Rp 500 billion.<\/p>\n
\"What most foreign investors want to do now is to shun our
\nmarket,\" the broker said, pointing out that a number of foreign
\nbrokerage firms, including Indosuez WICarr, Jardine Fleming,
\nCredit Lyonnais and Vickers Ballas Tamara, were regularly net
\nsellers.<\/p>\n
The head of research at BNI Securities, Adrian Lesmana, said
\nthat political and social uncertainty at home, along with
\npersistent demonstrations in the capital and several other major
\ncities had further discouraged investors from placing funds in
\nthe local equity market.<\/p>\n
\"Moreover, domestic investors are still showing a preference
\nfor placing their funds in bank time deposits, which currently
\noffer a higher yield,\" he said, pointing out that domestic banks
\noffered interest rates in the region of 60 percent for one-month
\ntime deposits.<\/p>\n
Several big cap stocks ended the day lower, with state
\ntelecommunications firm PT Telkom, which accounts for 17 percent
\nof market capitalization on the local bourse, sliding Rp 100 to
\nRp 1,525 on 5.57 million shares traded. Shares in the mining firm
\nPT Aneka Tambang fell Rp 25 to close at Rp 1,200, with 3.73
\nmillion shares changing hands, and shares in Semen Gresik shed Rp
\n75, falling to Rp 6,000 on 616,500 shares traded.<\/p>\n
Brokers attributed the fall in Semen Gresik's shares to the
\ndisappointment felt by investors after hearing Tuesday's
\nannouncement that Mexico's Cemex had succeeded with a bid to
\npurchase a 14 percent stake in Semen Gresik at only US$1.38 per
\nshare.<\/p>\n
\"The market expected the price to be higher than the $1.38
\nCemex offered on Tuesday,\" the Trimegah broker said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-stable-following-us-interest-rate-cut-1447893297",
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