Dollar-peg proposal for rupiah draws reactions

Dollar-peg proposal for rupiah draws reactions

SINGAPORE (AFP): Most Southeast Asian bourses reacted positively yesterday to proposals for Jakarta to adopt a currency board system pegging the rupiah to the dollar, with Singapore gaining 3.8 percent on the news.

Ironically, Jakarta share prices lost 2.2 percent as news of the proposal sent the rupiah to around 7,400 to the dollar in late Asian trading, from 9, 600 on Monday, making blue chips more costly for foreign investors.

In Singapore, a dealer at a local brokerage said: "The rising rupiah which led a major recovery in the other regional currencies helped boost sentiment, which of late has been getting better and better."

The Straits Times Industrials index of the Stock Exchange of Singapore closed 59.25 points higher to end at 1,602.97 while the broader All-Singapore index dipped 2.70 points to 417.71.

In Hong Kong, share prices slipped 0.1 percent lower here on profit-taking following overnight drops on Wall Street, dealers said.

"The bouts of profit-taking come after the index has made so much gains in past days," said Eugene Law, research director at Lippo Securities.

The key Hang Seng index lost 13.48 points to close at 10,859.67.

In Tokyo, Japanese share prices closed barely higher, as gains on buying of low-priced cyclicals and property leaders offset the impact of the steady selling of blue chips, brokers said.

"The unwinding of cross-shareholding is continuing, but selling is not strong enough to push share prices down sharply as expectations for additional economic measures are growing stronger day by day," the broker added.

The Nikkei stock average of 225 leading issues on the Tokyo Stock Exchange gained 0.09 points to end at 17,205.09. The Topix index of all first-section issues rose 4.82 points to 1,300.30 points.

In Sydney, the Australian Stock Exchange's main indicator, the All Ordinaries index, fell 17.3 points to 2,668.0. The All Industrials index fell 25 points to 4, 535.9 while the All Resources index eased 11.8 points to 1,183.3.

In Kuala Lumpur, Malaysia's key stock index rose 2.1 percent, reversing earlier losses as investors cheered the possibility of the Indonesian rupiah being pegged to the U.S. dollar, dealers said.

A research head at a local brokerage said investors' initial response towards Indonesia's possible move to peg the rupiah to the dollar stemmed earlier falls due to profit-taking and forced- selling activities.

The Kuala Lumpur Stock Exchange's 100-share weighted composite index climbed 15.17 points to finish at 742.57.

In Bangkok, Thai share prices closed 1.1 percent weaker after an active session amid profit-taking in the banking and communications sectors.

An analyst with Bookclub Finance and Securities plc said most of the selling was believed to have been led by local investors. Analysts also said there were some concerns about possible negative developments in the Gulf.

The Stock Exchange of Thailand (SET) composite index fell 5.98 points to 524.52, while the SET 50 select index finished 0.54 points in the red at 40. 25.

In Manila, Philippine share prices closed 1.4 percent higher in heavy trading as the peso strengthened and interest rates showed signs of easing.

The Philippine Stock Exchange index gained 28.18 points to 2,078.87.

In Seoul, share prices dropped 2.2 percent on the Korea Stock Exchange after institutional investors boosted profit-taking late in the session, dealers said.

A Ssangyong Investment Securities dealer said the market was unlikely to see a substantial rebound for some time, while institutions remain in a selling mode.

The composite index closed down 12.47 points at 541.77.

In Shanghai, the B shares, nominally reserved for foreign investors, soared 7.9 percent on strong buying interest, dealers said.

The Shanghai Stock Exchange's B share index rose 4.06 points to close at 55.61 points while the A share index of locally- traded stocks lost 14.31 points, or 1.1 percent, to 1,304.33 points.

In Taipei, the Taiwan Stock Exchange weighted price index slid 66.95 points to 8,567. 66.

In Auckland, the NZSE-40 index was down 4.76 points at 2,253.21.

In London, the FT-SE 100 index rose by 21.7 points to 5,622.6 points soon after the data was published, reversing earlier losses.

In Paris, the CAC 40 index rose by 0.44 percent to a record high point of 3,234.41 points from a record close on Tuesday of 3,220.94 points.