Rupiah breaks the 12,000 level against the dollar
JAKARTA (JP): The rupiah gained more ground against the U.S. dollar yesterday, passing the 12,000 psychological level on bullish sentiment in the regional market and dollar-selling by state banks.
It closed 7 percent higher at 11,600 against the dollar, compared to its close of 12,500 the previous day.
Currency dealers said the rupiah, which opened at 12,300, continued its rally of the past several days as the Japanese yen forged on to stabilize at 144.25 to the American.
"A bullish sentiment in the region helped the rupiah to gain a footing with the dollar," a chief dealer with a local private bank commented.
He said the strengthened yen forced most market participants to cut their long dollar position.
Dealers said many Singapore operators, who have been active in pressing down the rupiah against the American dollar over the past few months, made large stop-loss orders.
"Some Singapore operators were seen selling a substantial amount of dollars for the rupiah to cut their losses," the dealer said, pointing out that such stop-loss orders triggered other operators to follow suit.
Dealers also attributed the strengthening rupiah to persistent dollar selling by some state banks yesterday.
"Though the amount is limited, it has given a big boost to the rupiah stand," another dealer said.
Dealers said the intervention by state banks in the absence of fresh riots at home would likely cause the rejuvenated rupiah to test the 11,500 level in the days ahead.
Rupiah and share prices were under pressure last week due widespread rumors of massive riots in the capital on or around the commemoration of Independence Day Monday.
Mirroring the strengthening rupiah, stock prices on the Jakarta Stock Exchange (JSX) followed suit with the main price gauge closing 2.03 points higher at 405.89 on total turnover of 240.03 million shares valued at Rp 272.70 billion (US$23.50 million).
Gainers outnumbered losers by 49 to 39, with 95 stocks unchanged and 121 others untraded.
Associate director of state-owned securities house Bahana Securities, Andre Cita, said no outbreak of unrest coupled with bold measures by the monetary authority to improve the country's ailing banking system sent positive signals to the market in the short term.
"This has improved market sentiment in the local battered bourse."
He said some investors were starting to look into certain selective stocks with dollar earnings like Daya Guna Samudera, Aneka Tambang and Berlian Laju Tanker.
Other brokers attributed the slight rise in stock prices to massive buying orders in telecommunications provider PT Telkom and other blue-chip stocks yesterday.
"Yesterday's gains in the index were mostly on the Telkom gains though trading activities remain slow," another dealer with a local securities house said.
Telkom shares rose by Rp 75 to Rp 3,200 on 14.88 million shares, Indosat up Rp 25 to Rp 10,800 on 22.65 million, cigarette maker HM Sampoerna increased by Rp 200 to Rp 2,750 on 13.02 million shares and its competitor Gudang Garam followed suit by Rp 125 to Rp 8,125 on 940,000 shares.
Brokers said instant noodle producer Indofood Sukses Makmur closed higher by Rp 75 to Rp 2,125 on 22.65 million on market talk that some foreign investors had expressed interest in a substantial stake in the company. (aly)