Domestic market down on political concerns
JAKARTA (JP): The domestic financial market slipped further yesterday due to political maneuvering, with the rupiah holding at 15,250 against the U.S. dollar and stock prices inching lower by 1.4 percent, dealers and analysts said.
They added that regional bearishness, sparked by the weakening of the Japanese yen to 141 against the U.S. dollar, had also contributed to the local market's downturn.
Most investors squared their positions before the weekend and took profits ahead of Golkar's election of its new chairman.
"The market is still listless, except for some dollar buying by state banks," a dealer with a local private bank said, noting that state banks continued to purchase dollars to finance imports by state agencies.
"All eyes and ears are now directed toward Hotel Indonesia where Golkar's congress is being held. Most operators are just taking a wait-and-see stance until the new chairman is elected."
A local member of the House of Representatives said after meeting President B.J. Habibie yesterday that the IMF was waiting to see whether Golkar's election would threaten the current period of relative stability before the Fund disbursed its next US$1 billion tranche of the $43 billion bailout package it had arranged for Indonesia.
The dealer noted that the market was somewhat relieved to see the latest developments in Golkar, in which Minister/State Secretary Akbar Tandjung gained more support than his rival Edi Sudradjat, former defense and security affairs minister.
Some analysts said Akbar was backed by Habibie, while Edi was picked by supporters of former long-time president Soeharto.
Dealers said the rupiah hit a day low of 15,450 in the morning over reports that Edi had procured more support. But when it seemed that Akbar would be the winner in the afternoon, the rupiah regained some of its lost ground and closed the day at 15,200/350.
The rupiah closed Thursday at 15,200.
Share prices on the Jakarta Stock Exchange (JSX) also continued to decline, with the JSX Composite Index closing down 6.740 points at 463.581.
Trading turnover totaled 151.99 million shares valued at Rp 221.67 billion ($14.6 million).
Bahana Securities associate director and head of equity sales Andre Cita said most investors cashed in profits ahead of the weekend.
"A lot of companies have actually attracted foreign investors. But right now, most investors are trying to keep their profits," Cita said.
He said the companies which had attracted massive buying included state-owned cement maker PT Semen Gresik, gold and nickel miner PT Aneka Tambang and other companies with dollar earnings.
"Besides, everyone is a kind of distracted by the IMF, waiting for the results of Ginandjar's trip to Washington, and at the same time looking at Golkar's political developments," Cita said.
"If you combine those factors with the uncertainty of the Japanese yen, you will see that they make the market pretty lackluster."
The head of research at Vickers Ballas Tamara, Noraya Soewarno, agreed, saying the correction was just normal after the market experienced a rally.
The correction, however, was not so severe, thanks to rumors that the government and a foreign investor would soon announce a deal on Aneka Tambang, prompting investors to purchase the company's stocks.
"I think Aneka Tambang is the star of the week, just like Semen Gresik was last week," Noraya said.
Aneka Tambang continued to dominate trade yesterday, closing up Rp 50 to Rp 2,050 with 15.5 million shares changing hands.
Semen Gresik, however, lost Rp 650 to close at Rp 11,300 as most investors took profits. Semen Gresik soared 35 percent when it resumed trading Tuesday, after the government announced that it selected Mexico's Cemex SA as its preferred bidder.
Cemex offered $1.38 per share for a 35 percent government stake and a 16 percent public stake at the Indonesian cement producer.
Heavyweight state-owned domestic telephone monopoly PT Telkom closed unchanged at Rp 4,350 with 8.6 million shares traded as did international telephone operator PT Indosat which ended the session at Rp 17,800 from 99,000 shares changing hands.
Cigarette giant PT Gudang Garam dipped Rp 650 to Rp 8,450, while competitor PT HM Sampoerna gained Rp 25 to Rp 2,275. (rid)