Rupiah still under pressure while shares climb 0.6%<\/p>\n
JAKARTA (JP): The rupiah remained weak at 14,500 yesterday
\nwhile stock prices on the Jakarta Stock Exchange (JSX) edged up
\n0.6 percent on reports of a possible International Monetary Fund
\n(IMF) bailout disbursement, dealers and stockbrokers said.<\/p>\n
They said market sentiment was generally improving following a
\nstatement from Coordinating Minister for Economy, Finance and
\nIndustry Ginandjar Kartasasmita over the weekend that the
\ngovernment would sign a new letter of intent with the IMF this
\nweek.<\/p>\n
\"The market is generally positive at the news. It is reflected
\nby a steady rupiah and an improving composite stocks index.
\nHowever, in the longer term, uncertainty remains,\" a stockbroker
\nsaid.<\/p>\n
The JSX composite index closed up 2.426 points at 423.085.
\nTurnover totaled 166.2 million shares valued at Rp 151.8 billion
\n(US$10.3 million).<\/p>\n
Currency dealers said trading in the rupiah was very thin and
\nthe currency was hovering around 14,500 all day against the U.S.
\ndollar. It ended at 14,500\/650, compared to Friday's close of
\n14,100.<\/p>\n
They said strong dollar demand by local commercial banks to
\nsettle their foreign exchange debts and trade finance arrears
\ncontinued to exert downward pressure on the currency.<\/p>\n
In addition, rumors circulating the market did not help the
\ncurrency amid the heightening political tension.<\/p>\n
\"Most investors are reluctant to unload dollars because rumors
\nabout possible rioting tomorrow (today) are getting louder in the
\nmarket,\" a currency dealer with a local foreign exchange bank
\nsaid.<\/p>\n
Labor leader Muchtar Pakpahan has warned that he plans to
\nbring about 10,000 workers out onto the streets of Jakarta today
\nto demand President B.J. Habibie relinquish his powers to a
\ntransitional government.<\/p>\n
But Jakarta Military Commander Maj. Gen. Sjafrie Syamsuddin
\nsaid his troops would crack down on workers staging street
\nprotests.<\/p>\n
Currency dealers said the fear that protests against the
\ngovernment might again escalate into violence kept the rupiah
\nweak yesterday.<\/p>\n
Securities analysts also warned that positive sentiment could
\neasily be overrun by domestic factors, especially continuing
\npolitical infighting.<\/p>\n
Bahana Securities' associate director and head of equity sales
\nAndre Cita said that the improving local benchmark stock price
\nindex did not represent improving sentiment as most investors
\nremained on the sidelines.<\/p>\n
\"It does not really represent improving sentiment because
\nthere are a lot of uncertainties. And the uncertainties will
\ncontinue to dominate the market until there is a big move on the
\neconomic front,\" He said.<\/p>\n
He described the negotiations between the government and the
\nIMF was heading toward \"uncharted territory\" not imagined before,
\nand they needed a lot of technical inputs to draft policies to
\nhelp drag the country away from the economic abyss.<\/p>\n
However, Cita said that there were more hopes and
\nopportunities now than a few months ago when Soeharto was still
\nin power, and suggested that investors grab opportunities by
\npicking up quality stocks.<\/p>\n
A broker with a joint venture securities house said stock
\ntrading was virtually meaningless with its thin volume, but
\nselective buying in several large-cap stocks like state-owned
\ntelephone firms Telkom and Indosat helped shore up trading.<\/p>\n
Besides, increased trading in prospective firms with dollar
\nrevenues like Indah Kiat and Tjiwi Kimia also helped market
\nstanding.<\/p>\n
Telkom closed Rp 100 higher at Rp 3,900, Indosat jumped Rp 200
\nto Rp 15,700, Tjiwi Kimia rose Rp 50 to Rp 1,475 and Indah Kiat
\nrose Rp 150 to Rp 2,575. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-still-under-pressure-while-shares-climb-06-1447893297",
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