Local stocks up in moderate trading

Local stocks up in moderate trading

JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
rose 0.3 percent in moderate trading yesterday after President
Soeharto was sworn in as the country's president for a seventh
consecutive five year term, stockbrokers said.

They said uncertainties over the country's political situation
faded away after Soeharto was sworn in by the People's
Consultative Assembly yesterday.

"Though the market had anticipated Soeharto to resume his
presidential post, yesterday's ceremony really marked another
turning point for the country's political stability," a broker
with a local securities house said.

Stockbrokers said most investors were currently waiting for
the announcement of the new cabinet line-up later this week,
especially its economic team.

A broker with Trimegah Securities said most investors in the
local market speculated yesterday that Soeharto could announce
the setting up of a currency board system (CBS) in his
renomination speech to prop up the rupiah.

"The President, however, did not mention anything about the
CBS in his speech. This improved the trading mood," an analyst
with a local securities house said.

Bruce Rolph, head of equities at Bahana Securities said,
however, that many foreign investors sold stocks despite the
improvement in the general market mood.

He said most foreign brokerage houses like ING Barings, Credit
Lyonnais Securities, Merrill Lynch Indonesia, Jardine Flemming
Nusantara and SBC Warburg sold blue chip stocks.

"Foreign investors are a bit upset with the Indonesian
government as it has not given any clues on the ways it will try
to improve the country's teetering economy," he said.

He said foreign brokerage houses were net sellers yesterday.

The JSX Composite Index ended 1.39 points higher at 491.87
yesterday from 490.47 the previous day.

A total of 438.89 million shares changed hands on the regular
market valued at Rp 546.11 billion (US$53.54 million).

Rupiah

As stock prices rose slightly, the rupiah in the currency
market closed at 10,100/10,300 against the U.S. dollar yesterday
after hitting a day high of 9,600 in the morning session,
currency dealers said.

Yesterday's close was 3 percent higher than the previous day's
close of 10,500/10,700.

Dealers said the rupiah, which opened at 9,600/9,800 against
the dollar, was traded in a narrow range.

They said trading activity in the currency market remained
thin as most operators were waiting for the government to
announce its latest plans to strengthen the rupiah and improve
the country's paralyzed economy.

"Most offshore operators, especially from Singapore, do not
want to do anything in the market because they have no clue
whether the rupiah is going strengthen or weaken," a chief
treasurer with a joint-venture bank in Jakarta said.

Dealers said most investors were focussing on further
developments over the heated conflict between Indonesia and the
IMF concerning the implementation of economic reforms tied to the
international institution's $43 billion bailout package. (aly)