Stocks strengthen, rupiah still stable<\/p>\n
JAKARTA (JP): Share prices rose 4.2 percent yesterday and the
\nrupiah remained stable at 3,000 level against the U.S. dollar in
\nresponse to the lifting of the 49 percent foreign portfolio
\nholding limit and interest rate cuts, dealers and brokers said.<\/p>\n
The Jakarta Stock Exchange composite index closed up 21.282
\npoints at 533.870, with total turnover of 519.732 million shares
\nvalued at Rp 545.439 billion (US$179.4 million).<\/p>\n
Spot rupiah, which opened at 3,005\/3,020, weakened in morning
\ntrading when Bank Indonesia announced interest rate cuts by 300
\nbasis points, but strengthened in the afternoon and closed at
\n3,035\/3,045.<\/p>\n
Stockbrokers and foreign exchange dealers said the newly
\nannounced reform package had boosted market sentiment in stocks
\nand rupiah.<\/p>\n
A vice president at Mashil Jaya Securities, Tjandra Kartika,
\nsaid the government's move to scrap the foreign portfolio
\ninvestment limit and to lower interest rates was the only reason
\nfor yesterday's gains on the exchange.<\/p>\n
\"But it will only help the market in the short-term... not in
\nthe long-term,\" Tjandra said.<\/p>\n
Minister of Finance Mar'ie Muhammad said in a decree yesterday
\nthat the government had lifted a 49-percent limit of foreign
\nownership in listed firms on the Jakarta bourse. The new decree
\nwas also made effective yesterday.<\/p>\n
Jakarta Stock Exchange president Cyrill Noerhadi said that as
\na follow-up to the new regulation, the abolition of foreign
\nownership restrictions would \"technically\" become effective from
\ntoday.<\/p>\n
Bank Indonesia, the central bank, yesterday also cut its
\nbenchmark Bank Indonesia Certificate (SBI) interest rates in
\nanother follow-up move to the newly announced reform package.<\/p>\n
The bank cut its one- and three-month bilateral rates by 300
\nbasis points, leading to improved confidence on the stock market
\nwhich also helped rupiah sentiment.<\/p>\n
The bank lowered one- and three-month bilateral SBI rates to
\n27 percent and 25 percent respectively.<\/p>\n
But the bank kept other rates unchanged. Overnight bilateral
\nSBIs were kept at 15.0 percent, four-to-six day at 16 percent,
\nseven at 20 percent, two-week at 22 percent, six at 12.125
\npercent and one-year at 12.75 percent.<\/p>\n
The bank did not offer short-term securities (SBPUs) and did
\nnot carry out an SBI auction.<\/p>\n
Foreign exchange dealers said despite the cut in interest
\nrates the rupiah managed to buck the regional weakening trend,
\nindicating that market confidence on the currency was returning.<\/p>\n
\"But we have to wait until next week to see if the rupiah is
\nreally stable at the current level of 3,000,\" one local bank
\ndealer said.<\/p>\n
He said trading was still very thin, at $1 million, $2 million
\nand $3 million at the most.<\/p>\n
\"We are still very cautious. We prefer not to open a new
\nposition because we're afraid of getting burned once we enter a
\nnew position,\" he said.<\/p>\n
He added the market had felt eased rupiah liquidity, with
\ninterbank rates continuing to drop.<\/p>\n
Overnight rupiah was fluctuating between 35 percent to 60
\npercent yesterday and settled at between 30 percent to 40 percent
\nin the afternoon.<\/p>\n
Dealers said swap rates also fell across the curve, with
\nshort-dated swaps declining by three to five points while longer-
\nterm rates fell by 20 to 40 points.<\/p>\n
They said swap rates stabilized in the afternoon.<\/p>\n
One-month swap was at 54\/59, two at 100\/140, three at 135\/150
\nand six at 240\/260 points. (aly\/rid)<\/p>\n
Editorial -- Page 4<\/p>\n
Currency -- Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/stocks-strengthen-rupiah-still-stable-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }