New deal on debt talks revive market sentiment
New deal on debt talks revive market sentiment
JAKARTA (JP): A fresh deal on restructuring the country's
US$80 billion private-sector debt brought fresh hope to
Indonesia's battered financial market yesterday.
Securities dealers said that share prices, which had been
under strong selling pressure over the past several days, had a
rare increase, pushing up the main price index to close 3.5
percent higher.
The rupiah, which opened at 11,600 per U.S. dollar, rose to
close at 11,500, a slight increase from the previous day's
11,700.
A dealer with a joint venture bank said, however, that
positive news on the private sectors' debt rollover plan had not
significantly improved market sentiment in the currency market as
some market operators remained edgy over the country's
deteriorating political and economic situation.
"The fresh deal on private debt should have seen the rupiah
strengthen, but economic and political uncertainties barred it,"
he said.
Dealers said the rollover plan on Indonesia's overwhelming
corporate debt was crucial to pulling the country out of its
economic doldrums and restoring investor confidence in
Indonesia's hammered economy.
"The debt talk deal, along with the release of the IMF loan,
should bring the rupiah to the 9,000 level against the dollar," a
dealer with a local private bank said.
Indonesia and creditor banks agreed yesterday to extend
repayment of private-sector corporate debt by up to eight years
with a grace period of three years.
Germany's Deutsche Bank said the main points of a framework
debt deal had been agreed upon. Corporate and bank foreign
liabilities would be regulated and trade finance would be
maintained, throwing a lifeline to Indonesia's struggling
exporters.
Taking the mild lead of the rupiah, stock prices on the JSX
followed suit with the benchmark price index rising 3.5 percent
or 13.72 points to 406.32 points on a total turnover of 436.28
million shares worth Rp 481.03 billion ($43.73 million).
Stock analysts attributed the increase in the main price index
to positive market response to a fresh agreement on private debt
talks in Frankfurt.
"It is positive and it should improve investors' sentiment in
the country's battered market," said the head of research of
Vickers Ballas Tamara Securities, Noraya Soewarno.
She said the decline in the rupiah's value by almost 80
percent since July last year had caused the value of the
country's overseas private-sector debt to skyrocket and had
forced the country to the brink of collapse.
"But talks on debt restructuring really is like getting fresh
blood," she said.
Stock brokers said trading activities on the local bourse,
which has declined over the past eight days, were buoyant as some
investors bought back debt-ridden blue-chips stocks in
anticipation of the debt talk deal.
"Trading activities on the market were exuberant," a broker
with Mashill Jaya Securities said.
He said most local investors were euphoric over the debt talk
deal in Frankfurt. They responded by placing large buying orders
on stocks which had been under selling pressure over the past few
weeks. They bought shares in automaker Astra International,
Indofood Sukses Makmur, Bimantara Citra, Citra Marga Nusaphala
Persada, Tjiwi Kimia, HM Sampoerna, Gudang Garam.
The stock prices of Astra International rose Rp 300 to Rp 900
on a total turnover of 64.09 million shares. Noodle-maker
Indofood Sukses Makmur rose Rp 500 to Rp 1,575 on 73.74 million
shares, Bimantara Citra rose Rp 25 to Rp 375 on 5.56 shares and
Citra Marga Nusaphala Persada climbed Rp 25 to Rp 375 on 3.89
million shares.
But an analyst with a local securities firm said the increase
in the main price index did not necessarily reflect the return of
foreign investors' confidence in the country's pummeled market.
"It is just a market euphoric response because the country
still has to address other economic and political problems," he
said, pointing out that the country's political risk remained
high for foreign fund managers.
"Since the political risk is still high, foreign fund managers
are reluctant to place their funds here," he said. (aly)
JAKARTA (JP): A fresh deal on restructuring the country's
US$80 billion private-sector debt brought fresh hope to
Indonesia's battered financial market yesterday.
Securities dealers said that share prices, which had been
under strong selling pressure over the past several days, had a
rare increase, pushing up the main price index to close 3.5
percent higher.
The rupiah, which opened at 11,600 per U.S. dollar, rose to
close at 11,500, a slight increase from the previous day's
11,700.
A dealer with a joint venture bank said, however, that
positive news on the private sectors' debt rollover plan had not
significantly improved market sentiment in the currency market as
some market operators remained edgy over the country's
deteriorating political and economic situation.
"The fresh deal on private debt should have seen the rupiah
strengthen, but economic and political uncertainties barred it,"
he said.
Dealers said the rollover plan on Indonesia's overwhelming
corporate debt was crucial to pulling the country out of its
economic doldrums and restoring investor confidence in
Indonesia's hammered economy.
"The debt talk deal, along with the release of the IMF loan,
should bring the rupiah to the 9,000 level against the dollar," a
dealer with a local private bank said.
Indonesia and creditor banks agreed yesterday to extend
repayment of private-sector corporate debt by up to eight years
with a grace period of three years.
Germany's Deutsche Bank said the main points of a framework
debt deal had been agreed upon. Corporate and bank foreign
liabilities would be regulated and trade finance would be
maintained, throwing a lifeline to Indonesia's struggling
exporters.
Taking the mild lead of the rupiah, stock prices on the JSX
followed suit with the benchmark price index rising 3.5 percent
or 13.72 points to 406.32 points on a total turnover of 436.28
million shares worth Rp 481.03 billion ($43.73 million).
Stock analysts attributed the increase in the main price index
to positive market response to a fresh agreement on private debt
talks in Frankfurt.
"It is positive and it should improve investors' sentiment in
the country's battered market," said the head of research of
Vickers Ballas Tamara Securities, Noraya Soewarno.
She said the decline in the rupiah's value by almost 80
percent since July last year had caused the value of the
country's overseas private-sector debt to skyrocket and had
forced the country to the brink of collapse.
"But talks on debt restructuring really is like getting fresh
blood," she said.
Stock brokers said trading activities on the local bourse,
which has declined over the past eight days, were buoyant as some
investors bought back debt-ridden blue-chips stocks in
anticipation of the debt talk deal.
"Trading activities on the market were exuberant," a broker
with Mashill Jaya Securities said.
He said most local investors were euphoric over the debt talk
deal in Frankfurt. They responded by placing large buying orders
on stocks which had been under selling pressure over the past few
weeks. They bought shares in automaker Astra International,
Indofood Sukses Makmur, Bimantara Citra, Citra Marga Nusaphala
Persada, Tjiwi Kimia, HM Sampoerna, Gudang Garam.
The stock prices of Astra International rose Rp 300 to Rp 900
on a total turnover of 64.09 million shares. Noodle-maker
Indofood Sukses Makmur rose Rp 500 to Rp 1,575 on 73.74 million
shares, Bimantara Citra rose Rp 25 to Rp 375 on 5.56 shares and
Citra Marga Nusaphala Persada climbed Rp 25 to Rp 375 on 3.89
million shares.
But an analyst with a local securities firm said the increase
in the main price index did not necessarily reflect the return of
foreign investors' confidence in the country's pummeled market.
"It is just a market euphoric response because the country
still has to address other economic and political problems," he
said, pointing out that the country's political risk remained
high for foreign fund managers.
"Since the political risk is still high, foreign fund managers
are reluctant to place their funds here," he said. (aly)