Rupiah breaks the 12,000 level against the dollar

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)