Rupiah down on corporate dollar demand, shares up
Rupiah down on corporate dollar demand, shares up
Dow Jones, Jakarta
The rupiah ended lower on Tuesday as local companies continued to buy dollars on a view that the U.S. unit will remain strong in the near future amid expectations of aggressive U.S. interest rate hikes.
The local unit ended at Rp 9,410 per dollar, down from its close Monday at Rp 9,400.
Local companies are the main dollar buyers recently as they need the U.S. unit to hedge offshore obligations on worries over political fighting ahead of next month's presidential elections.
On the other hand, exporters are still reluctant to sell their dollars, expecting the U.S. unit to rise further, dealers said.
"Exporters are waiting to sell their dollars around Rp 9,500," said a dealer at a foreign bank.
Bank Indonesia is believed to have sold the dollar in small amounts via state banks to curb the rupiah's slide. The central bank's alleged intervention lifted the local unit up from its intraday low of Rp 9,425.
Dealers expect local companies to continue buying the dollar later this week amid expectations of the dollar's global strength.
They expect the rupiah to trade between Rp 9,400 and Rp 9,450 Wednesday.
Meanwhile, shares ended higher as bargain hunters bought blue chips that fell in the previous three sessions, dealers said.
"The market recovered from the recent sluggish performance," said a trader with a local securities firm. She added that buying, however, wasn't that heavy, capped by lingering concerns about the continued weakness of the rupiah.
The Jakarta Stock Exchange's main index ended up 11.073 points, or 1.6 percent, at 707.411, up from an intraday low of 692.870.
Gainers led decliners 62 to 27, with 71 stocks unchanged. Volume was 892 million shares valued at Rp 570 billion.
Telecommunications blue chips led the gainers.
Bellwether Telekomunikasi Indonesia ended up Rp 200, or 3 percent, at Rp 6,800 on a rebound. The stock fell 11 percent in the previous ten sessions.
Indonesian Satellite Corp. rose Rp 125, or 3.3 percent, to Rp 3,925 on bargain hunting.
Also higher on a rebound were shares in Bank Danamon, which gained Rp 100, or 3.9 percent, at Rp 2,675, and Bank Mandiri, which ended up Rp 25, or 2 percent, at Rp 1,150.
Shares in oil and gas producer Medco Energi ended up Rp 50, or 3.9 percent, at Rp 1,350 on expectations that it will complete its planned takeover of Australia's Novus Petroleum Ltd. later this month.
Dealers said they expect the market Wednesday to trade higher on further bargain hunting.