Financial market is unmoved by questioning of Soeharto
JAKARTA (JP): The local financial market lost ground on Wednesday as former president Soeharto was questioned by investigators from the Jakarta chief prosecutor's office, currency dealers and stockbrokers said.
The rupiah fell to 7,475 against the U.S. dollar in light trading on Wednesday, and stock prices also declined, falling .03 percent.
A chief dealer at a joint venture bank said that the rupiah, which opened trading at 7,450/7,550, barely moved on the day, as most traders stayed out of the market.
"Trading activities remained dull as most operators stayed on the sidelines," the chief dealer said, adding that trading volume reached only some US$80 million.
The rupiah's 7,475 Wednesday closing was slightly lower than its Tuesday's close of 7,400.
Currency dealers said that the dollar-rupiah trading band had narrowed to between 50 and 100, indicating considerable stability for the rupiah.
Dealers said that the market remained calm despite the rowdy antigovernment protests which coincided with the questioning of Soeharto.
Hundreds of students clashed with police and troops near the house of President B.J. Habibie and the office where Soeharto was questioned over allegations of corruption during his 32 years in power.
"Antigovernment rallies and clashes between students and security officers do not affect market sentiment anymore," the chief dealer said.
Dealers said that they expected the rupiah to be traded in the 7,400 and 7,600 range in the coming days, as most market participants had already squared their positions in the previous months.
Following the fall of the rupiah, share prices in the local bourse slid .03 percent.
The Jakarta Stock Exchange (JSX) Composite index fell 0.11 points to 398.78, with a total turnover of 148.06 million shares valued at Rp 184.35 billion ($24.67 million).
Losers outnumbered gainers 54 to 37, with 84 stocks remaining unchanged.
Stockbrokers attributed the fall in share prices to bearishness in the regional equity markets and persistent profit taking on certain stocks which led a market rally in the previous weeks.
"The investors remained concerned and had no mood to enter the market," Vonny Juwono, institutional sales broker with Trimegah Securindolestari, said.
Analysts said that investors had no incentive to enter the battered local bourse as there are no positive leads to attract them to the local market.
"The bearish mood is expected to continue in the coming days as investors had found no meaningful reasons to enter the market," Fitri Murniati, an analyst with BNI Securities, said.
Trimegah's Vonny said that certain foreign brokerage firms, such as Merrill Lynch Indonesia, SBC Warburg and Danareksa Sekuritas, continued to place buy orders worth around Rp 10 billion each, while ABN Amro and other securities firms continued to sell off the stocks they had bought the previous weeks.
"Trading activities will continue to decline ahead of the end of the year," she said.
Large cap stocks ended mixed, with market leader PT Telkom unchanged at Rp 2,975, with 17.37 million shares changing hands.
Share prices of mining firm PT Tambang Timah fell Rp 125 to Rp 5,900, with 179,000 shares being traded. Indah Kiat Pulp & Paper slid Rp 75 to Rp 2,425, with 2.37 million shares changing hands, and car maker Astra International fell Rp 25 to Rp 1,000 with 2.55 million shares traded. (aly)