Rupiah, stocks gain ground on private debt effect<\/p>\n
JAKARTA (JP): Indonesian markets gained ground yesterday with
\nthe rupiah improving to 14,700 against the U.S. dollar and stock
\nprices rising 3.4 percent as private debt arrangements agreed in
\nFrankfurt earlier last month came into affect today.<\/p>\n
Currency dealers said the improving Japanese yen, at 140
\nagainst the U.S. dollar, also contributed to the strengthening of
\nthe rupiah.<\/p>\n
A dealer with a local private bank said the market anticipated
\nthat the rupiah would continue to improve in line with the
\nsettlement of the private debt hangover.<\/p>\n
He said the market was positive with the establishment of the
\nIndonesian Debt Restructuring Agency (INDRA) which would start
\nworking today to settle huge private debts.<\/p>\n
\"Market sentiment is positive today, especially with INDRA. We
\nexpect the rupiah will strengthen to a more reasonable level,
\npossibly the level foreseen by the IMF, provided that the
\ngovernment can ensure political stability,\" the dealer said.<\/p>\n
The rupiah ended at 14,600\/850 to the dollar, off its lows of
\n15,100 to the greenback earlier yesterday. It closed at 14,850 on
\nMonday.<\/p>\n
The International Monetary Fund and the government have
\nprojected that the rupiah will improve to 10,000 to the dollar at
\nthe end of this year.<\/p>\n
Stock prices on the Jakarta Stock Exchange (JSX) tracked the
\nstrengthening of the rupiah, with the JSX Composite Index rising
\n14.689 points to close at 445.920.<\/p>\n
Most large-cap stocks gained ground yesterday, with heavy
\nweight state-owned telecommunications firm PT Telkom rising Rp
\n125 to Rp 4,175.<\/p>\n
State-owned satellite operator PT Indosat also climbed Rp 750
\nto close at Rp 17,200, cigarette maker PT Gudang Garam rose Rp
\n400 to Rp 8,700.<\/p>\n
Stockbrokers said the rising benchmark index was also
\nsupported by domestic investors who hunted stocks of companies
\nwhich promised to distribute dividends from last year's profits.<\/p>\n
Analysts said improving regional markets, spurred by the
\nimproving yen and market expectations over Indonesia's private
\ndebt settlement had especially boosted sentiment.<\/p>\n
Pentasena Arthasentosa Securities' head of research Mohammad
\nSyahrial said yesterday's increase in the stock index was
\ninstigated by market speculation on possible further
\nstrengthening of the rupiah following moves from INDRA.<\/p>\n
\"It is just a normal scene. When you have positive news, in
\nthis case about INDRA, you will see people speculating on stocks
\nto get some gains,\" Syahrial said.<\/p>\n
INDRA, envisaged by an agreement between Indonesian corporate
\ndebtors and their foreign creditors in Frankfurt earlier last
\nmonth, will start working today to help restructure private
\ndebts.<\/p>\n
INDRA will provide exchange rate risk protection and assurance
\non the availability of foreign exchange to private debtors that
\nagree with their creditors to restructure their external debt for
\na period of eight years, with three years grace during which no
\nprinciple will be payable.<\/p>\n
However, Syahrial warned that the good news would soon die
\ndown and uncertainties would continue to blanket the market. In
\nthat situation, the bearish sentiment would return.<\/p>\n
\"This bullish situation will be short-lived. The market
\nconcerns are still there as to whether the government can
\naccomplish all of its political agenda,\" he said. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-stocks-gain-ground-on-private-debt-effect-1447893297",
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