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.