Stocks gain ground, rupiah stable on reform package<\/p>\n
JAKARTA (JP): Local stock prices gained ground yesterday and
\nthe rupiah stabilized following a government announcement on
\nplans to lift foreign portfolio ownership limits and gradually
\ndecrease interest rates, analysts and dealers said.<\/p>\n
Stockbrokers said share prices on the Jakarta Stock Exchange
\nrose 7 percent yesterday -- the first rise since Aug. 27 -- with
\nthe composite index jumping 33.57 points to close at 512.58.<\/p>\n
The stock market lost 31 percent from its peak level on July 8
\nwhen the composite index reached 740.88 points.<\/p>\n
Dealers said yesterday's largest intraday increase since July
\n8 was in response to the government's reform package
\nannouncement.<\/p>\n
"The market responded positively. We expect the government
\nwill follow up on the decision quickly, so investors will fully
\nregain their confidence," said one stockbroker.<\/p>\n
Yesterday's increase was driven by large cap stocks. Most blue
\nchip stocks like Telkom, Indosat, Gudang Garam, Bank Negara
\nIndonesia and HM Sampoerna booked gains yesterday.<\/p>\n
Head of research at Sigma Batara Securities, Fadjar Limin
\nSutandi, said he suspected the measures were aimed at addressing
\nthe primary market.<\/p>\n
"I'm afraid it will not help trading on the secondary market.
\nBut, let's see how the market reacts tomorrow," he said.<\/p>\n
Fadjar said investors were still waiting for positive action
\nby the government to prevent the rupiah and stock market from
\ntumbling further.<\/p>\n
Most securities analysts agreed the government's planned
\nmeasures would help enliven investors' confidence in the
\ncountry's capital market, but that would not be enough.<\/p>\n
Yesterday's announcement also helped prevent the rupiah from
\nfurther falling against the U.S. dollar, foreign exchange dealers
\nsaid.<\/p>\n
Spot rupiah, which opened at 3,000\/3,040 against the U.S.
\ngreenback, dropped to a day low of 3,070 but soon recovered
\nfollowing the announcement to close at 3,025\/3,045.<\/p>\n
Dealers said trading was slow and volume was thin throughout
\nthe day, with the rupiah continuing to suffer from sustained
\nweakness in the region.<\/p>\n
They said a strong recovery in the stock market might have
\nimproved sentiment, but further falls in the baht and the
\nMalaysian ringgit kept the rupiah below the 3,000 level.<\/p>\n
One local bank chief dealer said Singapore players started
\nreleasing their dollars after the government announced the
\nmeasures and helped bring the rupiah up to 2,995.<\/p>\n
But then domestic corporates and banks quickly bought cheap
\ndollar and forced the rupiah to again cross the 3,000 level, he
\nsaid.<\/p>\n
"The appetite for dollar remains strong among local
\ncorporates. I think their confidence on rupiah has not returned
\nyet even after the government announced some measures to
\nreinvigorate the economy," he said.<\/p>\n
The market was injected a fresh liquidity from the maturing
\nBank Indonesia Certificates (SBIs) totaling Rp 855 billion.<\/p>\n
The central bank had channeled liquidity credits to 52
\ntroubled banks, which then helped ease liquidity in the market, a
\ndealer said.<\/p>\n
Interbank rates fell again yesterday, with overnight rupiah
\ndropping to 25 percent from 60 percent in the morning and one-
\nmonth to 35 percent from over 65 percent.<\/p>\n
However, the central bank maintained its rates for bilateral
\nSBIs yesterday. The bank did not accept short-term securities
\n(SBPUs) and also did not hold an SBI auction.<\/p>\n
One-month swap was at 65\/85, two at 110\/150, three at 155\/180
\nand six at 290\/310 points. (aly\/rid)<\/p>\n
Cement -- Page 10<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/stocks-gain-ground-rupiah-stable-on-reform-package-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }