Pressure on rupiah remains; stocks also down slightly

JAKARTA (JP): The rupiah remained under pressure on Thursday, closing slightly down at 9,225 against the U.S. dollar, while stock prices ended the day 0.7 percent lower.

Currency dealers said the rupiah hit an intraday low of 9,350 against the U.S. dollar in the morning following news that deliberation of political bills in the House of Representatives had hit a new snag.

Nevertheless, sentiment on the rupiah improved in the afternoon after reports spread that the House was set to pass the bills. The rupiah ended the day's trading at 9,225 to the dollar, slightly lower than Wednesday's close of 9,175.

"The rupiah strengthened once market players started to believe that the House of Representatives would pass the political bills on schedule," a chief dealer with a joint venture bank said.

Dealers said that concerns had escalated over the past few days after it appeared that deliberation of the political bills was falling behind schedule, giving rise to fears that the general election would be postponed.

Currency dealers said that dollar sell-offs by certain state banks helped the rupiah to advance slightly against the dollar in the afternoon.

They also warned that long-term sentiment on the rupiah had not improved and pointed out that concerns over the country's social and political situation had not abated.

Elsewhere, share prices on the Jakarta Stock Exchange (JSX) fell 0.7 percent, with the JSX Composite Index closing 2.97 points lower at 407.27.

Trading turnover totaled 363.8 million shares valued at Rp 266.3 billion.

Gainers lead losers by 39 to 38, with 85 shares remaining unchanged.

Stockbrokers attributed the fall to bearishness on the regional equity markets and certain investors takings profits made on blue chip stocks the previous day.

"Our market is again being dictated to by the regional markets," said an institutional sales broker with Trimegah Securindolestari.

The broker added that foreign firms which bought blue chip stocks earlier this week sold of their holdings ahead of the weekend.

Large-cap stocks ended the day mixed on Thursday, with shares in the market-leading, state-owned telecommunications firm PT Telkom falling Rp 125 to close at Rp 3,325 on 10.9 million shares traded and state-owned international call operator PT Indosat gaining Rp 125 to Rp 10,375 on 767,500 shares.

Cigarettemaker PT Gudang Garam was down Rp 100 at Rp 10,800 on 257,000 shares traded, while competitor PT HM Sampoerna was up Rp 175 at Rp 5,400 on 3.2 million shares.

Analysts said that investors were watching closely for new developments in the country's political and social situation, leaving them with little scope to take a long term view.

"Investors are still afraid to come here because there are so many uncertainties in all sectors," Mashill Jaya Securities' head of research Edhi S. Widjojo said. (aly)