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.