IMF loan news boosts rupiah but stocks down

JAKARTA (JP): The rupiah continued to book slight gains yesterday on positive market response to the International Monetary Fund's announcement of the disbursement schedule for much-needed bailout funds to the country.

The positive sentiment did not extend to the bruised stock market. Prices continued to slide and the main price gauge ended 1.6 percent lower.

Currency dealers said the rupiah opened at 11,200 to the U.S. dollar and continued to hover around that level, before eventually closing at 11,100.

It was slightly firmer than Tuesday's close of 11,175.

"News the IMF would soon disburse another US$1 billion to Indonesia has given a boost to the rupiah to strengthen," a dealer with a local private bank said.

IMF managing director Michel Camdessus said late Tuesday the next disbursement of the bailout funds for Indonesia would be on Sept. 25, Oct. 23 and Nov. 25.

Dealers said limited dollar unloading of the rupiah by state banks also lent support to the currency.

State banks were seen selling between US$30 million and $50 million, the dealer said.

Bank Indonesia's auction of its one-month promissory notes at an interest rate of 70.44 percent was cited as another factor in the rupiah's gain.

"The overall sentiment for rupiah is positive," another dealer said.

Dealers said news reports of a minor clash between supporters of the ousted leader of the Indonesian Democratic Party (PDI), Megawati Soekarnoputri, and her replacement Soerjadi failed to ignite massive dollar buying by investors.

Despite the steady rupiah, stock prices on the Jakarta Stock Exchange (JSX) continued to lose ground in line with the fall of the equity market in the region.

The JSX Composite Index fell 1.6 percent, down 6.17 points to 360.92 points on total turnover of 156.38 million shares changing hands in the regular market valued at Rp 248.22 billion.

Losers outnumbered gainers by 60 to 31, with 88 stocks unchanged and 109 others untraded.

Stockbrokers said trading volume in the local market would remain thin as there was no fresh lead that would lure foreign investors to return to the market.

Trading turnover has dropped to about Rp 200 billion from Rp 500 billion prior to the crisis.

"There is not much activity in the local market as some inventors have long stayed away," a broker with Trimegah Securindo Lestari said.

Head of research of Mashill Jaya Securities Edhi S. Widjojo said most investors continued to discard stocks of state-owned firms and switched their investment to Bank Indonesia's promissory notes.

"Most investors prefer money market instruments to equity," he said.

Most stocks of state-owned companies fell, with state- telecommunication firm PT Telkom sliding Rp 275 to Rp 2,500 on 3.92 million shares traded.

State international telephone operator PT Indosat dropped Rp 325 to Rp 8,600 on 559,000 shares traded, tin miner PT Tambang Timah fell Rp 25 to Rp 6,000 on 712,500 shares and gold and nickel producer Aneka Tambang lost Rp 75 to Rp 1,875 on 27.61 million shares. (aly)