Rupiah weakens as stocks rebound<\/p>\n
JAKARTA (JP): The rupiah weakened further on Tuesday but stock
\nprices managed to rebound in late trading after a significant
\ndrop in the morning session.<\/p>\n
Foreign exchange dealers said lingering negative sentiment due
\nto the unstable social and political situations were the main
\nfactors behind the weakening rupiah.<\/p>\n
\"The resignation of acting State Secretary Bondan Gunawan and
\nnews that Bank Indonesia Governor Sjahril Sabirin will resign
\nadded to the already weak sentiment,\" a dealer at a local bank
\nsaid after the close of trading.<\/p>\n
The rupiah closed at Rp 8,633 per dollar compared to Rp 8,560
\nthe previous day.<\/p>\n
The currency touched its intraday low of 8,725 before it
\nrecovered after Sjahril denied reports of his resignation.<\/p>\n
Sjahril denied Tuesday that he will resign as governor of the
\ncentral bank.<\/p>\n
\"I don't have any plan to resign and have never informed the
\npresident that I would resign,\" Sjahril said in a written
\nstatement.<\/p>\n
He called on market participants to remain calm and not listen
\nto \"the baseless news report\" about his resignation.<\/p>\n
A foreign newswire reported early Tuesday that the central
\nbank governor had informed President Abdurrahman Wahid that he
\nwould resign later this week over the high-profile Bank Bali
\ncase.<\/p>\n
But currency dealers said that the bombings in Medan, the
\nprovincial capital of North Sumatra, on Sunday and Monday were
\nthe main reasons for the bearish currency market.<\/p>\n
Participants said that they worried more chaos would follow.<\/p>\n
However, a dealer at a state owned bank said that dollars have
\nbeen overbought, given the small fluctuations of the rupiah
\nagainst the U.S. dollar in the last two days in light of the
\nworsening security situation.<\/p>\n
\"But rupiah stability will take time despite the slight
\nimprovement in market sentiment for the Indonesian currency,\" he
\nadded.<\/p>\n
The domestic currency and equity markets will be closed on
\nThursday in observance of the Ascension Day of Jesus Christ.<\/p>\n
Stocks gain<\/p>\n
Unlike the rupiah, the Jakarta Stock Exchange (JSX) Composite
\nIndex managed to rebound as a buying spree occurred in late
\ntrading with numerous stocks benefiting.<\/p>\n
The JSX Composite Index, the exchange's main price barometer,
\nwent up by 7.31 points or 1.6 percent at 468.708 after hitting
\nits intraday low of 441.63.<\/p>\n
Gainers exceeded decliners 80 to 38 while 71 stocks were
\nunchanged.<\/p>\n
Gunarto Widyomantoro, operations director of PT Sanex
\nSecurities, speculated that the surge in the main index preceded
\ndefensive actions by the government in a bid to boost market
\nsentiment before the listing of Bank Central Asia on Wednesday.<\/p>\n
\"The index was down 20 points in the morning session, but
\nunexpectedly it turned around and managed to close up seven
\npoints,\" he said.<\/p>\n
He said the government had an obvious interest in creating a
\ngood market for BCA's listing.<\/p>\n
The bank offered 662.24 million shares or 22.5 percent of its
\ntotal equity in the initial public offering between May 19 and
\nMay 23.<\/p>\n
Each share was sold at Rp 1,400.<\/p>\n
Gunarto said there was a possibility of profit taking in
\nshares of BCA on its first day of trading.<\/p>\n
\"A lot of investors bought shares at the initial public
\noffering only to sell them back to the market for quick profits,\"
\nhe said.<\/p>\n
He added that the market in general would remain nervous due
\nto fears of continued unrest and political instability, at least
\nuntil August when President Abdurrahman Wahid is scheduled to
\ndeliver his accountability speech before the People's
\nConsultative Assembly.<\/p>\n
Another analyst at a local securities house said the market
\nrebound on Tuesday was purely a technical rebound after large
\naccumulated losses during the past weeks.<\/p>\n
\"Actually, there was no fresh news that caused the market to
\nrebound. It was just technical,\" he said.<\/p>\n
Shares of state owned telecommunication company PT Telkom
\nended up 3.5 percent or Rp 100 to close at Rp 2,950 and
\ninternational call operator PT Indosat rose 1.6 percent or Rp 150
\nto Rp 9,500.<\/p>\n
PT Astra International increased by 7 percent or Rp 175 to Rp
\n2,700 on the company's announcement of reaching a break even
\npoint during the first quarter.<\/p>\n
And cigarette maker PT HM Sampoerna rose by Rp 25 to Rp 11,600
\nwhile competitor PT Gudang Garam lost Rp 50 to close at Rp
\n11,525. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rupiah-weakens-as-stocks-rebound-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}