Stock prices drop while rupiah firms<\/p>\n
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
\ndropped 1 percent yesterday on market concern over the ongoing
\nbattle between the government and the International Monetary Fund
\n(IMF).<\/p>\n
Stockbrokers said trading activity remained moderate with
\nforeign brokerage houses taking a "wait-and-see" attitude toward
\ncurrent developments.<\/p>\n
Brokers said the dispute between the government and the IMF
\nhad prompted investors to move to the sidelines, resulting in a
\nquiet market.<\/p>\n
"Most foreign brokerage houses are on the selling side," a
\nbroker with Trimegah Securities said, pointing out that
\nSBC Warburg, OSBC, Jardine Flemming Nusantara and Indosuez WICarr
\nwere net sellers yesterday.<\/p>\n
The JSX Composite Index fell 5.3 points to 490.47 from 495.08
\nthe previous day.<\/p>\n
A total of 348.11 million shares changed hands on the regular
\nmarket worth Rp 483.34 billion (US$48.33 million).<\/p>\n
An analyst with Mashill Jaya Securities, Eddy Widjoyo, said
\ntrading activity had lost its direction as the market had not
\nseen any decisive move from the government to improve the
\ncountry's wrecked economy.<\/p>\n
"It's difficult to see the market direction during such
\nuncertainty," he said.<\/p>\n
Brokers and analysts said the unresolved standoff between
\nIndonesia and the IMF over solutions to improve the country's
\nailing economy had sent negative signals to investors.<\/p>\n
Brokers said investors in the local market became increasingly
\nworried over the IMF's announcement to postpone its second $3
\nbillion tranche of funding for Indonesia as Jakarta was seen as
\nnot consistently implementing its economic reform programs.<\/p>\n
"That only worsens public confidence in the government, and as
\na result, more companies are likely to collapse," Eddy said.<\/p>\n
Despite the tension, the government said yesterday it would
\nsend a team to Washington soon for talks with the IMF and the
\nUnited States.<\/p>\n
The deputy secretary-general of the Economic and Monetary
\nResilience Council, Fuad Bawazier, said the team would seek a
\nresolution to the stalemate.<\/p>\n
As stocks declined, the ailing rupiah managed to recoup from
\nits lower rates earlier in the day. The currency closed at
\n10,500\/10,700 against the American dollar in very moderate
\ntrading, currency dealers said.<\/p>\n
They said the rupiah slipped to as low as 11,300\/11,500 in the
\nmorning trading yesterday due to the standoff between the
\ngovernment and the IMF.<\/p>\n
Yesterday's close was stronger than the previous day's close
\nof 10,800\/11,000.<\/p>\n
Currency dealers said the rupiah, which opened at
\n11,200\/11,350, continued to recover gradually against the
\nAmerican greenback in late trading on strong market speculation
\nthat the government would go ahead with its plan to peg the
\nrupiah to a foreign currency at a fixed exchange rate under the
\ncurrency board system.<\/p>\n
Dealers said overseas funds, especially from Singapore, sold
\ndollars for rupiah, speculating that a currency board could be
\nannounced soon.<\/p>\n
"Overseas operators sense that President Soeharto will come up
\nwith something new in his inauguration speech tomorrow (today),"
\na chief dealer with a local private bank said, pointing to a
\nlikelihood that the government would introduce the currency board
\nsystem plan. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/stock-prices-drop-while-rupiah-firms-1447893297",
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