Stocks, rupiah close higher on Habibie's dimming hopes<\/p>\n
JAKARTA (JP): Share prices and the rupiah gained ground on
\nTuesday in active trading following a decision by Armed Forces
\nchief Gen. Wiranto's refusal to run as President B.J. Habibie's
\nrunning mate in the elections this week.<\/p>\n
Financial analysts said that Wiranto's decision, a major blow
\nto Habibie's chance in the presidential election, led to active
\ntrading in the stock and money markets.<\/p>\n
"Expectation that Habibie will lose in the presidential
\nelection certainly fueled trading activities," a securities
\ndealer said.<\/p>\n
At the close of trading the JSX index gained 30.43 points, or
\n5.5 percent, to close at 583.64 in active trading with 993
\nmillion shares worth Rp 1.17 trillion changing hands. Gainers
\nwell exceeded decliners 160 to 5, with 104 stocks ending
\nunchanged.<\/p>\n
The rupiah was moving in tandem with the JSX index.<\/p>\n
The rupiah closed 4.2 percent higher at a six-week high of Rp
\n7,573, compared to the previous day's close of Rp 7,890.<\/p>\n
"The strengthening of the rupiah was a prerequisite to sustain
\nthe recovery process of Indonesia's capital market," one forex
\ndealer said.<\/p>\n
Vonny Juwono from PT Trimegah Securindolestari said that
\nWiranto's refusal to take up Habibie's running mate offer had
\nreassured strained market sentiment.<\/p>\n
Also reducing Habibie's chances are expectations that his
\nwidely criticized accountability speech will be rejected. If the
\nspeech is rejected, Habibie's chances of winning the presidential
\nelection will be even slimmer.<\/p>\n
The People's Consultative Assembly (MPR) is scheduled to hold
\na plenary session on Wednesday to elect the country's new
\npresident. Habibie will compete against Megawati Soekarnoputri
\nand Abdurrahman "Gus Dur" Wahid.<\/p>\n
Analysts said that a move earlier in the day by the Supreme
\nAudit Agency (BPK) to approve the release of a report on the Bank
\nBali corruption scandal to the House of the Representatives also
\npleased the market.<\/p>\n
The move, which would lead to the resumption of suspended aid
\npayments from the International Monetary Fund (IMF) and the World
\nBank to a cash-strapped Indonesia, was another crucial factor in
\nthe rejuvenated trading activities.<\/p>\n
The Supreme Audit Agency earlier refused to release in full
\nthe audit results on the Bank Bali scandal, which allegedly
\ninvolved Habibie's inner circle. The agency had said the
\ndisclosure would breach the bank secrecy law. The agency released
\na summary of the audit report, but the IMF and WB objected to the
\ndecision and delayed aid disbursement.<\/p>\n
"The decision to disclose the scandal is certainly good news
\nfor Habibie's opponents. If Habibie's close aides were really
\ninvolved in the scandal, he is finished," one analyst said.<\/p>\n
M. Aidil, an analyst at Fander Securities, said big
\ncapitalized companies' shares (big caps) contributed
\nsignificantly to the surge of yesterday's index.<\/p>\n
"Telkom (the state-owned telecommunications company) rose by
\nRp 200 on heavy trading volume, and had contributed about 7
\npoints to the JSX index," he said.<\/p>\n
Aidil said cigarettemaker PT H.M. Sampoerna also contributed
\nsignificantly to the higher index on its Rp 1,300 fat gains on
\nTuesday.<\/p>\n
He said the positive political news had pushed the index
\nhigher following an unusually high daily trading volume of over
\nRp 1 trillion.<\/p>\n
For the past few weeks the daily trading volume has remained
\nconstant at about Rp 500 billion.<\/p>\n
"Considering the improving political developments, local
\ninvestors have begun to think that it is now safe to be in the
\nbuying position," he said.<\/p>\n
Their perception was supported by the fact that it was high
\ntime for a technical rebound for the JSX after it had lost points
\nconsecutively over the past few days.<\/p>\n
However Aidil said that only local investors had been active
\nin the market.<\/p>\n
"Maybe after the presidential poll foreign investors will join
\nthe bandwagon," he said, adding that he was assuming that the
\nnext president would be a reformist one.<\/p>\n
"If this happened, we would see the index, as previously
\npredicted by many, breach the 800 level at the end of the year."<\/p>\n
Aidil said that when the presidential poll was over and the
\nrupiah was strengthening, foreign investors would reenter the
\nmarket and enable JSX daily trading value to reach Rp 1 trillion.<\/p>\n
"This is the time when we could really use a long-term outlook
\nfor our equity investment here," he said. (udi)<\/p>",
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