Business activity grinds to a virtual halt

JAKARTA (JP): Business activities were virtually at a standstill yesterday, with banks and companies closing their offices over fears of possible mass demonstrations.

Many banks that pledged Tuesday to remain open, closed their offices yesterday, while Bank Indonesia, the central bank, suspended clearing operations.

Almost every shopping center in the capital also closed.

The Jakarta Stock Exchange (JSX), however, remained open, though trading was extremely light with only a few shares being traded.

"Many securities dealers stayed home over fears that the planned mass demonstrations in the capital would turn violent," a securities dealer said.

Some securities dealers also went home early, he said, adding that the situation along Jl. Sudirman, where the JSX building is located, was very tense because large numbers of soldiers could be seen almost everywhere.

Some soldiers were even deployed inside the JSX building, the dealer said.

Troops closed and barricaded most of the central business district's main roads in anticipation of possible massive protests.

Despite this, the JSX's main price index rose 2.4 percent to 424 points yesterday in thin trading, with a total turnover of about 16.71 million shares worth Rp 10.12 billion (US$920,000).

The rupiah was not traded in Jakarta due to a suspension of clearing operations by the central bank. In Singapore, the Indonesian currency gained slightly, rising to 11,000 against the U.S. dollar, up from its close at 12,300 the previous day.

"There is no trading on the rupiah in the Jakarta spot market because most banks are closed," one dealer said from his home.

The dealer said that the rupiah was predicted to weaken further in the coming days due to the country's uncertain political situation.

Moslem leader Amien Rais planned to hold mass "people power" demonstrations at the city's Monas square yesterday but called off the plan due to security reasons.

Thousands of students, however, continued their antigovernment protests at the House of Representatives complex yesterday.

Asian currencies enjoyed an unexpected reprieve as Indonesia's Armed Forces maintained a heavy presence in Jakarta and the massive antigovernment protests were called off at the last minute.

Elsewhere in the region, the Singapore dollar took heart from the calmer situation in Indonesia, firming at the 1.65 level to the U.S. dollar, despite discouraging news on the domestic front.

The ringgit strengthened to the 3.80 level in late trade, but dealers said the dollar would stay at about 3.75 for the time being, with players eying Indonesia.

The Philippine peso strengthened due to the relative calm in Jakarta and optimism for a peaceful transfer of power after last week's presidential elections.

The Thai baht inched higher, though traders kept a wary eye on a parliamentary debate over four executive decrees aimed at enabling bailouts of the finance sector and breaking a liquidity squeeze.

Finance Minister Tarrin Nimmanahaeminda appealed to lawmakers to ratify the decrees to enable the government to float bonds worth billions of dollars to fund the bailouts.

The South Korean won rose on fears of heavy month-end dollar sales by exporters and on the easing of tensions in Indonesia. (aly)