Rupiah ends up at 3-month high on Indosat share sale
Rupiah ends up at 3-month high on Indosat share sale
Dow Jones, Jakarta
The Indonesian rupiah ended at a fresh three-month high versus the U.S. dollar Monday after Singapore Technologies Telemedia reached a deal to buy a controlling interest in the country's second-largest telecommunications company.
The dollar ended at Rp 8,810, much lower than Rp 8,875 at Friday's close.
Over the weekend ST Telemedia signed a deal to pay US$634 million for a 41.9 percent stake in Indonesia Satellite Corp., or Indosat, in the largest sale of an Indonesia company to a foreigner since the 1997-98 Asian crisis.
News of the Indosat stake sale sparked optimism in the market that foreign companies are willing to buy selective Indonesian assets.
The rupiah was already on the rise last week due to a slew of positive news recently. The International Monetary Fund agreed to give a new loan to Indonesia last week, praising the country's efforts to reduce its budget deficit.
The rupiah has also benefited from a perception the country is making strides to improve security after the Oct. 12 Bali bombing. Police have arrested the ringleaders of the attack. The government also reached an outline peace deal earlier this month with rebels in Aceh.
The U.S. currency is likely to test support at Rp 8,800 Tuesday, traders said.
Supporting the dollar are lingering concerns over investment. Excluding the ST Telemedia deal, Indonesia has failed to attract large-scale investment this year largely due to concerns over legal and bureaucratic corruption. The IMF said in approving its latest loan that Indonesia must reform its judiciary to protect foreign investors.
Meanwhile, the Thai baht was up in tandem with its regional counterparts and softer demand for dollars. There was little market reaction to strong third-quarter gross domestic product data released earlier Monday as the numbers were largely in line with expectations.
The dollar ended the local trading session at 43.19 baht, down from 43.30 baht Friday.
Thailand's third-quarter GDP expanded 5.8 percent on year as a recovery in exports was complemented by strong private-sector expansion. The country led other major Southeast Asian economies in the July-September period.
On a seasonally adjusted basis, GDP rose 1 percent from the preceding quarter.
The data were slightly better than the average 5.7 percent year-on-year and 0.9 percent seasonally adjusted quarter-on- quarter forecasts from a Dow Jones Newswires poll earlier.
Elsewhere, the New Taiwan dollar was off highs as the outflow of foreign funds from the local stock market prompted interbank players to cover short dollar positions.
Foreign investors sold a net of more than NT$3 billion worth of shares Monday.
The central bank was also said to have supported the U.S. dollar. A local bank trader said the central bank was believed to have bought dollars in the morning, when it was trading around NT$34.76.
The U.S. currency closed at US$34.796, down from $34.835 Friday, after trading between NT$34.735 and NT$34.804.
The Philippine peso bucked the regional trend to weaken on increased corporate demand for dollars.
The U.S. currency ended at its intraday high of 53.660 pesos on the Philippine Dealing System, up from 53.550 pesos Friday.
Traders said many companies continued to buy dollars for hedging import requirements and debt payments.
Some also opted to cover their requirements on expectations trading activity would wind down ahead of the Christmas holidays.
"The exchange rate is likely to consolidate around current levels as higher corporate demand offsets any increase in remittance inflows," said a trader at a local bank.
Another trader said the peso is unlikely to depreciate sharply, with some banks believing the central bank is positioned to support the peso.