Miyazawa aid pledge fails to cheer embattled market
Miyazawa aid pledge fails to cheer embattled market
JAKARTA (JP): A bearish financial market persisted on Friday
despite Japan's pledge to lend Indonesia US$2.4 billion from the
Miyazawa Fund.
Currency dealers said the commitment failed to lift market
sentiment as a rise in demand for the greenback from local and
offshore operators continued to pressure the local currency.
"The rupiah managed to strengthen against the dollar on news
of the Japanese aid commitment in early trading, but fell back in
late trading due the rise in dollar demand," a chief dealer at a
joint venture bank said.
The rupiah, which opened at 8,550/8,650, traded in a range of
8,450 and 8,750 during the entire trading day. It closed at
8,700, unchanged from Thursday.
"But trading volume was thin... with total volume of less
than $100 million," he said.
Dealers said persistent dollar demand by local banks in their
efforts to finance imports of raw materials and service offshore
obligations halted the rise of the rupiah in early trading.
"The rupiah's outlook remains bearish, there is nothing
changed," another dealer added.
Share prices on the local market also continued to slide for
the second consecutive day as profit-taking dominated trading
activities.
The Jakarta Stock Exchange Composite Price Index fell 4.47
points to close at 405.55 with transactions involving 201.62
million shares worth Rp 154.7.
Decliners outdistanced advancers 44 to 37, with 74 stocks
unchanged.
Large-cap stocks ended the day trading mixed, with state-owned
domestic telephone operator PT Telkom sliding Rp 75 to Rp 2,950
on 4.2 million shares traded and state-owned international call
operator PT Indosat climbing Rp 50 to Rp 11,650 on 917,000
shares.
Car manufacturer PT Astra International closed Rp 25 lower at
Rp 800 on 1.6 million shares traded. Cigarette maker PT HM
Sampoerna dipped Rp 250 to Rp 5,700, and rival PT Gudang Garam
slipped Rp 100 to Rp 11,450.
State-owned diversified mining firm PT Aneka Tambang closed Rp
25 at Rp 1,525, while state-owned tin miner PT Tambang Timah lost
Rp 75 to close at Rp 4,700.
Stockbrokers said several foreign brokerage firms sold their
stocks to reap profit on the gains they received early this week.
"Profit-taking ahead of the weekend pressure sent the stock
prices down further," a broker with Trimegah Securindolestari
said.
Stockbrokers said uncertainty in the country's economic and
political front would remain a major barrier for offshore
investors.
"It is difficult to find long-term investors at the moment as
most investors prefer quick gains," Fitri Murniati, an analyst at
BNI Securities, said.
Fitri said unresolved problems such as government's much-
criticized banking recapitalization program, which is accused of
a lack of transparency, not only scared investors away but
further muddied the investment climate in Indonesia.
"There are a lot of things that remain unclear here," Fitri
said. She added investors would only feel secure if the problems
were resolved. (aly)