Stocks, rupiah buoyed by optimism over CGI talks<\/p>\n
JAKARTA (JP): Market optimism that international lenders will
\nprovide a significantly larger loan to Indonesia this year
\ncontinued to keep the rupiah and stock prices on the Jakarta
\nStock Exchange (JSX) buoyant yesterday.<\/p>\n
Currency dealers said the market was bullish on the rupiah
\nbecause of expectations that a positive outcome from the
\nConsultative Group on Indonesia (CGI) meeting would propel the
\nrupiah even higher.<\/p>\n
"It's all from CGI. The market is almost certain that the CGI
\nwill meet Indonesia's demands for more funds to finance its
\neconomic restructuring program," a chief dealer with a local
\nprivate bank said.<\/p>\n
The rupiah strengthened 2.5 percent to close at 13,000 against
\nthe U.S. dollar on the Jakarta spot market yesterday, up from
\nTuesday's close of 13,500.<\/p>\n
"If market expectations are realized, the rupiah will still
\nhave room to strengthen past 13,000 and test 12,500," the chief
\ndealer said.<\/p>\n
The CGI, a consortium of donor countries and multilateral
\nlending agencies chaired by the World Bank, began its two-day
\nmeeting in Paris yesterday. The CGI is expected to lend Indonesia
\nat least US$8 billion in this fiscal year.<\/p>\n
Dealers said the rupiah was also supported by Bank Indonesia's
\nmove to start weekly auctions of one-month promissory notes
\n(SBIs) yesterday.<\/p>\n
Although the auction of one month SBIs raised only Rp 7
\ntrillion (US$530 million) in public funds -- from an initial
\ntarget of Rp 13 trillion -- it absorbed excess money out of some
\nsegments of the market.<\/p>\n
Positive sentiment also spread to the local stock market,
\nsending the main price index 0.3 percent higher at the close of
\ntrade yesterday.<\/p>\n
The JSX Composite Index closed 1.565 points higher at 485.096.
\nTurnover totaled 230.9 million shares valued at Rp 365.78 billion
\n(US$27.8 million).<\/p>\n
Head of research at Vickers Ballas Tamara, Noraya Soewarno,
\nsaid the strengthening rupiah and optimism over the CGI meeting
\nhad stimulated speculative local investors to place buying orders
\non selected stocks.<\/p>\n
"The dominant factor seems to be the CGI meeting, especially
\nwith the reentry of the Netherlands after being excluded by
\nformer president (Soeharto)," she said.<\/p>\n
Despite the continuing gains, foreign investors remained on
\nthe sidelines because there were no fresh leads to draw them back
\ninto the market, stockbrokers said.<\/p>\n
With the relative absence of foreign investors, local
\ninvestors continued to dominate trading, targeting some big cap
\nstocks with foreign exchange debts like cigarette maker PT HM
\nSampoerna and car manufacturer PT Astra International.<\/p>\n
Astra closed Rp 50 higher at Rp 1,125 on 10.29 million shares
\nchanging hands. Sampoerna climbed Rp 475 to Rp 3,575 with 9.16
\nmillion shares traded, while competitor PT Gudang Garam gained Rp
\n300 to Rp 9,050 on 1.27 million shares traded.<\/p>\n
However, the strengthening rupiah sparked arbitrage selling on
\ndual-listed stocks like state satellite operator PT Indosat,
\nstate domestic telecommunications giant PT Telkom, and tin mining
\ncompany PT Tambang Timah.<\/p>\n
Indosat dipped Rp 275 to Rp 14,725 on 75,500 shares traded,
\nwhile Telkom managed to book an Rp 25 gain, closing at Rp 4,375
\non 11.99 million shares traded. Tambang Timah dropped Rp 525 to
\nclose at Rp 8,700 on 589,500 shares traded. (rid)<\/p>",
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"sponsor": "Okusi Associates",
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