Rupiah ends up on optimism of growth

Rupiah ends up on optimism of growth

Dow Jones
Jakarta

The rupiah ended higher on Tuesday, on buying fueled by
optimism that a powerful blast in Jakarta last week likely will
not hurt the country's overall economy or disrupt next week's
presidential election, dealers said.

The dollar ended at Rp 9,110, down from its close of 9,280 on
Friday. Tuesday's closing level was the U.S. unit's lowest since
July 27, when it ended at 9,095. The local currency market was
closed on Monday for a public holiday.

Dealers said the rupiah's recovery after the blast last week
showed that investors have become immune to terrorist attacks in
Indonesia following the Bali bombing in 2002.

"The long weekend was also peaceful, which gave further
reasons for market participants to unload the dollar," a dealer
said.

Coordinating Minister for Economic Affairs Dorodjatun
Kuntjoro-Jakti added to the optimism on Tuesday, saying he
expects the economy to grow 4.8 percent this year, in line with
the government's target, despite the bombing outside the
Australian embassy in Jakarta last Thursday.

"Our economic fundamentals are better now than in the previous
years," he told reporters.

Dealers said they expect the presidential runoff election on
Monday to be peaceful as they do not see any connection between
the bombing and the poll. Surveys show that former security
minister Susilo Bambang Yudhoyono is expected to beat President
Megawati Soekarnoputri.

Also helping the rupiah was the 1.4 percent rally in
Indonesian stocks on Tuesday, as foreign investors continued to
buy back Indonesian shares after heavy selling following the
recent bombing.

Dealers said the dollar may continue falling on Wednesday, but
the decline is expected to slow after Tuesday's sharp fall.

They expect the dollar to trade between 9,050 and 9,150 on
Wednesday.

Meanwhile, shares ended higher as investors remained hopeful
that the aftereffects of the bomb attack would not undermine the
economy and disrupt the Sept. 20 presidential elections, dealers
said.

"Also, a peaceful election is expected to further boost the
rupiah and consequently prop up sentiment," said a trader with
Catur Pilar Securities.

The Jakarta Stock Exchange's main index ended up 11.241
points, or 1.4 percent, to 809.016 - a fresh 20-week high.

Gainers led decliners 63 to 58, with 76 stocks unchanged.
Volume was 1.87 billion shares valued at Rp 1.7 trillion.

Telekomunikasi Indonesia led gainers, ending up Rp 150, or 1.9
percent, at Rp 8,200, on expectations that the company will make
an announcement later this week on its planned 2-for-1 stock
split.

Indonesian Satellite Corp. jumped Rp 150, or 3.5 percent, to
Rp 4,425 on expectations of higher 2004 revenue.

Bank Danamon climbed Rp 200, or 5.6 percent, to Rp 3,800 and
Bank Central Asia gained Rp 100, or 5.3 percent, to Rp 1,975.

Bucking the trend, Bank Rakyat fell Rp 25, or 1.3 percent, to
Rp 1,925 on profit-taking.

Dealers said they expect the market on Wednesday to trade
higher, with profit-taking likely to cap gains.