Rupiah and stock prices remain firm in quiet trade
JAKARTA (JP): The rupiah was almost unbudged at 7,475 against the U.S. dollar in very quite trading and stock prices edged up 0.4 percent on Tuesday.
Currency dealers said that lingering domestic political instability failed to weigh down market sentiment over the currency, which has hovered around the 7,400 level against the American dollar in the past few weeks. It closed at the 7,500 level on Monday.
"Political uncertainty is no longer a dominant factor behind the ups and downs of the rupiah to the dollar," a chief dealer with a local private bank said.
The dealer said the rupiah's movement against the American greenback was purely based on the supply and demand market mechanism as most market participants had become accustomed to the almost daily student demonstrations.
Dealers said that although there was some dollar demand by certain offshore market participants during midday trading, it failed to bring the rupiah down further because of dollar unloading by several state banks.
Dealers said several state banks offered the dollar at 7,500 and 7,550 levels for the entire trading day.
Moreover, they added that most overseas market operators, who have been aggressively speculating on the rupiah, stayed clear of the local currency market ahead of the year-end.
"They prefer to move to the sidelines in the lead-up to year- end," another dealer said.
Keeping in step with the rupiah, share prices inched up 0.4 percent on Tuesday due to late buying on certain blue-chip stocks which have a large market capitalization in the local bourse.
The Jakarta Stock Exchange (JSX) main price gauge closed 1.46 points higher to 387.73 with 415.24 million shares worth Rp 296.27 billion (US$39.76 million)
Losers led gainers by 47 to 41 with 82 stocks remained unchanged.
The benchmark price gauge, however, hit an intraday low of 373.99 points before lunch following the persistent profit taking and the 2.3 percent drop in the Dow Jones Industrial Average on Monday.
Stockbrokers said that the market was losing direction as many investors were absent amid escalating political tension at home, but the unexpected late buying program by several brokerage firms had kept the benchmark price index in the positive territory on Tuesday.
"But I suspect this late buying program was made by 'invisible hands' of those who want to keep share prices afloat," said Vonny Juwono, an institutional sales broker with Trimegah Securindolestari.
While difficult to prove the intervention of 'invisible hands', she said the government might stand behind a buying program to polish up the tarnished image of the local bourse.
Head of research of Mashill Jaya Securities Edhi Widjojo concurred, saying both local and foreign investors were staying clear of the local bourse due to persistent uncertainty on the country's political and economic fronts.
"So we did not expect any increase in share prices amid this economic and political uncertainty," he said.
Trimegah's Vonny said that while some foreign brokerage firms like Merrill Lynch Indonesia and Jardine Fleming Nusantara placed more selling orders than buying ones, others like ING Barings Indonesia, Dongsoh Kolibindo and Credit Lyonnais remained on the buying side on Tuesday.
Share prices of mining firm PT Aneka Tambang rose Rp 100 to Rp 1,750 on 8.04 million shares traded and international call operator PT Indosat climbed Rp 50 to Rp 10.750 on 1.14 million shares. State telecommunication firm PT Telkom shed Rp 25 to RP 2,700 on 11.19 million shares traded. (aly)