Rupiah end unchanged, stocks gain 2.3 percent

Rupiah end unchanged, stocks gain 2.3 percent

JAKARTA (JP): The rupiah remained steady to close at 7,550
against the U.S. dollar in dull trading on Monday but stock
prices gained 2.3 percent.

Currency dealers said trading activities had significantly
subsided and most participants had moved to the sidelines of the
local market.

"I think most operators did not want to build any new position
now as they squared their position the previous month," a chief
dealer with a local private bank said.

The dealer said the rupiah -- which traded in a narrow range
between 50 and 100 -- had clearly shown its stable standing
against the dollar over the past few weeks.

Dealers said the rupiah had long shrugged off any negative
impact of persistent antigovernment protests which had become
commonplace events to the financial market during the past
several weeks.

"Sentiment in the currency market is not directed by the
political situation anymore," the dealer said.

Most dealers warn that the rupiah -- which has stabilized
around the 7,500 level against the U.S. dollar in the past few
weeks -- will likely weaken at the year-end due to fresh dollar
demand by local businesses to settle their foreign exchange
obligations.

"Although the rupiah has managed to stay afloat, dollar demand
ahead of the year-end will put pressure on it," another dealer
said.

Dealers said that although some state banks stepped into the
market by unloading dollars on Monday, fresh dollar demand by
other state banks had capped the rupiah's gains.

"We observed some state banks buying dollars while other state
banks unloaded dollars for the rupiah," one said.

Unlike the rupiah, the gain in share prices on the local
market came on the back of a surprising buying program on
particular blue-chip stocks, stockbrokers said.

The Jakarta Stock Exchange (JSX) Composite Index closed up
9.06 points to 399.46 on a total turnover of 255.88 million
shares valued at Rp 253.87 billion (US$33.84 million).

Gainers led losers by 59 to 36 with 85 stocks unchanged.

Brokers said strong gains on Wall Street, which led the Hong
Kong market to soar following the lowering of interest rates in
China, had lifted market sentiment in Indonesia and other
regional markets.

"Technically, share prices in the local market should decline
but bullishness in other regional markets helped them to surge,"
said Vonny Juwono, an institutional sales broker with Trimegah
Securindolestari.

Securities analysts said that although lingering political and
social uncertainties had not adversely affected the market
sentiment in the local bourse, the absence of any positive
incentives had weighed it down.

"We are a bit surprised to see the rise in share prices as
there are no positive factors to uplift sentiment," said analyst
with a local securities firm.

Vonny said that despite bearish sentiment on the part of
foreign investors, foreign brokerage firms including SBC Warburg,
ABN Amro, Hoare Govett, Credit Lyonnais and ING Barings
Securities Indonesia still placed buying orders on particular
stocks.

Shares of telecommunications firm PT Telkom rose Rp 150 to Rp
2875 on 11.77 million shares, pulp and paper PT Tjiwi Kimia
climbed Rp 125 to Rp 1,925 on 11.04 million shares and cigarette
maker PT HM Sampoerna rose by Rp 175 to Rp 5,275 on 8.46 million
shares. (aly)