Relieved markets give lift to rupiah
Relieved markets give lift to rupiah
JAKARTA (JP): Relief that independence day passed peacefully
boosted the rupiah yesterday but failed to save the local stock
market from dipping further.
Currency dealers said market cheers over the peaceful
celebration of the country's commemoration of its 53rd
anniversary of independence on Monday sent the rupiah to a day
high of 12,400 against the U.S. dollar.
"The market was relieved after the calm celebration of
independence day, and those holding dollars started selling them.
All these things boosted the rupiah," a dealer with a local
private bank said.
There had been widespread rumors that independence day
celebrations would lead to renewed rioting throughout the
country. Such speculation proved completely unfounded.
The weakening Japanese yen against the dollar, however,
limited the rupiah's rally.
The rupiah, which opened at 12,750, closed at 12,525/600
against the greenback yesterday, firmer than Friday's close at
12,700.
Indonesian markets were closed Monday for the national
holiday.
The dealer said state banks were seen selling dollars in the
morning at 12,600, buying them later at 12,400 level.
"State banks made big profits yesterday, unlike in previous
weeks," he said.
State banks have been selling dollars for rupiah regularly
over the past couple of weeks, but it is unclear whether they are
acting independently or on behalf of the central bank.
Dealers said the focus today would be on the auction of one-
month central bank papers. Bank Indonesia set the target for its
fourth auction of one-month promissory notes (SBIs) at Rp 13
trillion, unchanged from last week.
Last week's auction absorbed Rp 15.4 trillion from the money
market at a weighted average rate of 69.5 percent per annum,
higher than the previous week's average rate of 68.3 percent.
"If the auction results in even higher rates, the rupiah will
definitely strengthen again," a dealer with another private bank
said.
Stock prices on the Jakarta Stock Exchange (JSX) dropped 2.6
percent yesterday despite the trends boosting the rupiah.
The benchmark JSX Composite Index fell 10.77 points to close
at 403.85 with 64 stocks falling and 19 rising.
Karman Pramurahardjo, an analyst with Harita Kencana
Securities, said the gloomy outlook in the country's economy
coupled with disappointing first-semester corporate financial
results to be announced in the coming days had discouraged
investors from returning to the local market.
Chief dealer at Bali Securities, Hendra Sunarto, said profit
taking on gains made by investors Friday last week and a bearish
sentiment in the regional market weighed down sentiment in the
country's equity market yesterday, causing most investors to dump
their stocks.
"The fall of the regional market has a negative impact on the
trading activities in the market," he said.
Other brokers also said that massive arbitrage selling by
investors in dual-listed companies like heavyweight state
telecommunications PT Telkom caused the main price gauge to
decline further yesterday.
Telkom, which accounts for 17 percent of market
capitalization, fell Rp 200 to Rp 3,125 on 2.1 million shares
traded.
Other brokers said the fall of the local bourse was also
sparked by news that the government extended the deadline for
selling control of state-owned cement producer PT Semen Gresik.
The government said yesterday it would extend an Aug. 19
deadline for bids to control Gresik because of objections to the
sale.
The news prompted a drop in companies that are linked to the
privatization program, such as tin miner PT Tambang Timah and
general mining firm PT Aneka Tambang.
Semen Gresik dropped Rp 300 to Rp 10,775 on 2 million shares
changing hands, while Aneka Tambang fell Rp 150 to Rp 2,125 on
12.8 million shares traded and Tambang Timah slid Rp 100 to Rp
7,500 on 498,500 shares traded. (aly/rid)