JSX books slight gain in moderate trade

JAKARTA (JP): Prices on the Jakarta Stock Exchange (JSX) improved fractionally yesterday in moderate trading after losing ground the previous two days.

But securities brokers said the general mood remained bearish as investors were still confused by the government's conflicting signals over its plan to adopt a currency board.

The brokers said most foreign investors remained on the sidelines, waiting for further clarification about the plan to peg the rupiah to a foreign currency at a fixed exchange rate.

Octavianus Tedjojuwono, a senior broker with Bahana Securities said many local speculative investors sold second and third-line stocks for profit.

He said foreign brokerage houses like Indosuez WI Carr, Credit Lyonnais, ING Barings, which topped the trading last week, did not make any big deals.

In contrast local brokerage house like Makindo, Bahana Securities, Danareksa Sekuritas, Lippo Securities and Trimegah Securities booked large transactions, he said.

"It is just irrational. Local investors were making massive speculative trading transactions despite the absence of foreign ones," he said.

Brokers and analysts said that there were no fresh incentives to entice foreign investors back to the trading floor.

"I think foreign investors are still confused as there is no clear indication yet to peg the rupiah to a foreign currency," Edhy Widjoyo, an analyst from Mashill Jaya Securities pointed to a lessening of the pressure from the International Monetary Fund (IMF) to Indonesia's plan to adopt a currency board system to stabilize the rupiah.

The JSX Composite Index closed barely higher by 0.39 points to 483.80 from 483.41 points the previous day.

Around 588.78 million shares changed hand on the regular market valued at Rp 624.06 billion (US$68.57 million).

As stocks remained stagnant, the rupiah ended firmer to close at 9,050 after opening at 9,250/9,300. The rupiah closed at 9,100/9,300 yesterday.

A chief dealer with a joint venture bank said that the rupiah, which peaked at 9,000 yesterday in the morning session, managed to end higher against the American dollar as Singapore operators unloaded their dollar holdings for the rupiah out of fear that Indonesia would peg the rupiah to a fixed rate under the currency board system.

"While Jakarta banks remained calm, Singapore operators made big dollar sales for the rupiah," the dealer said. (aly)