Local market jittery over new riot fears
Local market jittery over new riot fears
JAKARTA (JP): High anxiety reigned in the local financial
market on Friday due to rumblings of renewed rioting and weak
regional sentiment.
Currency dealers said the rupiah dived to an intraday low of
12,000 against the U.S. dollar, but managed to gain a footing in
late trading to end the day at 11,650 from its 11,950 opening.
The Indonesian currency gained ground in the afternoon after
offshore operators sold their dollar holdings.
"It is just a common view ... people square their position
ahead of the weekend on the gains they made the previous days," a
chief dealer with a local private bank said.
Securities and foreign exchange analysts characterized market
sentiment remained following several massive student
demonstrations in recent days demanding President B.J. Habibie's
resignation.
Some fear escalating political and social tensions may result
in fresh riots on the scale of the unrest in May, when thousands
of shops and buildings were looted and burned in the capital and
other cities.
Weak regional sentiment also contributed to the bearish
dealings, they said.
"Social and political uncertainty at home has determined the
direction of our rupiah so far," said Robert Z. Toruan, a dealer
with Bank Niaga. He stressed that stability on political and
social fronts was vital for a stable rupiah-dollar exchange rate.
Robert contended that although the central bank had repeatedly
intervened in the market by selling dollars for the rupiah
through state banks on Friday, the move was counteracted by bulk
demand by offshore operators.
"It is not effective to intervene in the market anymore as the
amount of dollar selling by state banks was eaten up by large
dollar buying by foreign investors."
Currency dealers said the weak rupiah was expected to trade
between the 11,800 and 12,000 level next week.
Stock prices on the Jakarta Stock Exchange (JSX) also
declined, with the main price index falling 3.21 points to
324.04, on a total turnover of 327.27 million shares changing
hands valued at Rp 209.02 billion (US$17.04 million).
Losers were ahead of gainers 45 to 32, with 88 stocks
unchanged.
Stockbrokers said listless regional markets and the plunge in
the New York Stock Exchange on Thursday dragged down market
sentiment in the local bourse.
"Trading activities are quiet as investors are scared to enter
the equity market," an institutional sales broker with Trimegah
Securindo Lestari said.
Brokers said strong buying sentiment on state-owned
cementmaker PT Semen Gresik on Thursday -- after the government
set the new bidding price for foreign investors -- also turned
sour because most investors preferred to take profits.
"Investors took profits first as they are afraid that further
social unrest might occur during the weekend," the broker said.
Semen Gresik rose Rp 325 -- after hitting an intra-day high of
Rp 9,800 -- to 8,400 on 8.45 million shares traded.
Head of research of BNI Securities Adrian Lesmana told The
Jakarta Post on Friday that market fears of social unrest arising
from student protests had not diminished.
"Though there were no reports of student rallies on Friday,
investors remained scared to enter the market," he said.
Trading was marked by the suspension of trading activities of
PT Astra Graphia and PT Hanson Industri Utama due to significant
increases in share prices. (aly)