Rupiah weakens as stock prices gain ground<\/p>\n
JAKARTA (JP): The rupiah weakened against the U.S. dollar
\nyesterday as stock prices on the Jakarta Stock Exchange (JSX)
\nrose 2.9 percent.<\/p>\n
\"Yesterday (Monday), the rupiah resisted regional weaknesses.
\nBut today (yesterday) it didn't. Positive news disseminated by
\nthe government failed to improve market sentiment,\" one local
\nbank dealer said.<\/p>\n
Dealers said the rupiah, which managed to go up to 5,550
\nagainst the dollar during lunch break from an early low of 5,725
\nin the morning, closed weaker at 5,600\/5,800.<\/p>\n
They said the rupiah was dragged down by the fall of the South
\nKorean won, a downgrade in Asian debt ratings and the dollar
\nliquidity squeeze.<\/p>\n
Another dealer said the market was confused by the
\ngovernment's plan to issue promissory notes denominated in
\ndollars.<\/p>\n
\"Is that part of the IMF- (International Monetary Fund)
\nsupported program or not. We don't know what's really going on as
\navailable information is yet unclear,\" the dealer said.<\/p>\n
The weakening rupiah, however, did not affect stock prices at
\nthe JSX as the main price gauge rose 2.9 percent on strong buying
\nof most second-line stocks yesterday.<\/p>\n
The JSX composite index closed 11.18 points higher to 397.03,
\nwith total turnover of 593.04 million shares valued at Rp 455.09
\nbillion (US$82.7 million).<\/p>\n
Stock brokers said the rise of the main index was marred
\nby the suspension of most second-line stocks when their prices
\nrose by 20 percent yesterday.<\/p>\n
Among suspended stocks were Bakrie Land Development,
\nLippoland, Sierad Produce, Royal Sentul Highland, Jaya Real
\nProperty, Maharani Intifinance, Summarecon Agung, Duta Anggada
\nRealty, Bhuwanatala Indah Permai, Panasia Filament Inti, Sarasa
\nNugraha, Sekar Laut and Igar Jaya.<\/p>\n
An institutional equity broker with Trimegah Securities said
\nmost companies bought their own stocks to make a good closing
\nprice by the end of this year.<\/p>\n
\"There is a lot of window-dressing today (yesterday),\" the
\nbroker said.<\/p>\n
\"Some corporations want to make prices of their stocks look
\ngood so their annual financial report looks better,\" the broker
\nsaid.<\/p>\n
The head of research at Mashill Jaya Securities, Tjandra
\nKartika, said the outlook for the JSX would still be gloomy,
\nespecially after the downgrade of Indonesia's debt by Standard &
\nPoor's and Moody's Investors Service.<\/p>\n
\"This downgrade means that Indonesia will be considered a
\nnegative investment spot by most institutional investors in the
\nUnited States, like pension funds and insurance companies,\" he
\nsaid.<\/p>\n
Meanwhile, the head of research at Pentasena Securities,
\nMohammad Syahrial, said the market had anticipated such a
\ndowngrade long before the two agencies announced their new
\nratings.<\/p>\n
\"The overall mood is quite good as the market seems to feel
\nrelieved with the government's moves to set up a special team to
\nsolve private sector debt,\" he said.<\/p>\n
President Soeharto set up a task force Monday, led by former
\ncabinet minister Radius Prawiro, to help the private sector seek
\nrollover facilities from foreign creditors.<\/p>\n
But Syahrial said the market was still waiting for more
\nconstructive and direct moves on the part of the government to
\neliminate various distortions in the economy. (aly\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-weakens-as-stock-prices-gain-ground-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}