RI market steady on positive sentiment

RI market steady on positive sentiment

JAKARTA (JP): The Indonesian financial market closed the week
higher yesterday on positive sentiment over the economic outlook
with international donors pledging more aid for the country.

The rupiah maintained its strength, closing at 13,350 against
the U.S. dollar on the Jakarta spot market, while share prices on
the Jakarta Stock Exchange (JSX) gained 2.6 percent, dealers and
stockbrokers said.

Analysts said the euphoria over the International Monetary
Fund's pledge of a further US$6 billion in aid in addition to the
imminent release of $1 billion to the country had buoyed the
markets yesterday.

"The market has received the new IMF package gleefully,"
Bahana Securities associate director and head of equity sales
Andre Cita said.

"I'm very pleased with what has happened in the market,
especially the series of good bits of news which have come in.
That's encouraging," he added.

After strengthening 7 percent on Thursday, the rupiah remained
steady against the U.S. dollar yesterday in a thin market as
operators took a break ahead of the weekend.

The announcement of new loans from the IMF and the World Bank,
and the rescheduling of Indonesian sovereign debt at one stage
lifted the rupiah to Rp 12,800 on Thursday, but profit taking
later sent it back above Rp 13,000.

Yesterday the rupiah was trading at 13,100 in the morning, but
inched down in the afternoon to close at 13,300/400, dealers
said.

They said state banks were continuing to stand behind the
rupiah by selling their dollar holdings.

The strong rupiah and positive sentiment boosted share trading
on the local bourse, stockbrokers said.

The JSX Composite Index closed 12.462 points higher at
486.234. Trading turnover totaled 570.46 million shares valued at
Rp 551.49 billion (US$41.3 million).

Stockbrokers said domestic investors dominated trading as they
scrambled to gain from the good news coming into Indonesia. They
said that foreign investors had continued to remain on the
sidelines, despite the positive sentiment.

Cita agreed and said foreign investors were waiting for the
government to move to revive the economy and ensure social
stability.

"We did not see as much foreign buying as we would like to. A
lot of foreign investors I spoke to are waiting to see if the
economy is not just going to stabilize but actually begin to move
forwards again."

"They also want to make certain that the social situation will
remain stable."

Socgen-Crosby Indonesia's head of research Goei Siauw Hong
noted that domestic investors were still hunting out state-owned
stocks and stocks plagued by rumors.

"Our market is more rumor-driven now. Investors do not look
into the fundamentals of the companies they invest in," Hong
said.

He said domestic investors had continued to focus their buying
on companies that were part of the government's privatization
program, with state mining company PT Aneka Tambang gaining Rp 75
to close at Rp 2,475 on 17.4 million shares traded.

However, profit-taking hit food giant PT Indofood Sukses
Makmur, which had earlier made huge gains on rumors that a
foreign investor would acquire a stake in the company.

Indofood shed Rp 150 to close at Rp 2,175 on 62 million shares
traded, topping the list of the most actively traded stocks.

Banking stocks also extended their gains as local investors
scrambled to buy shares in banks considered to be healthy.

Bank Negara Indonesia gained Rp 50 to close at Rp 425 on 14.1
million shares traded, Lippo Bank gained Rp 75 to close at Rp 950
on 35 million shares, and Bank Internasional Indonesia rose Rp 25
to close at Rp 400.

Heavyweight state telephone monopoly PT Telkom climbed Rp 125
to close at Rp 4,625, while state satellite operator PT Indosat
surged Rp 1,700 to finish the day on Rp 16,200. (rid)