Rupiah extends rally, stocks down on profit taking
Rupiah extends rally, stocks down on profit taking
The Jakarta Post, Jakarta
The rupiah continued to appreciate for a third straight day on
Friday after the JW Marriott Hotel bombing.
The local unit closed at Rp 8,567 per U.S. dollar compared to
8,590 the previous day. The rupiah will likely strengthen further
next week if no serious incident occurs on the weekend, dealers
said.
Dealers said that the positive statement from the government
about the economy, and the commitment to continue the economic
reform program including assets sales and the privatization
program had also heartened investors. The sale of government
shares in state enterprises and assets under the Indonesian Bank
Restructuring Agency (IBRA) to foreign investors should increase
the inflow of hard currencies, which in turn would give a boost
to the local currency.
The Marriott bomb blast, which killed 10 people, was not as
severe as the Bali bombing incident, which killed more than 200
people mostly foreign tourists.
Some analysts have also said that the local financial market
had been able to recover quickly from the Marriott blast partly
because the market was now more used to such incidents.
"The increasing stability of macroeconomic indicators has also
created a certain confidence in the economy," said one dealer.
Meanwhile, shares fell on Friday as investors took profit in
blue chips ahead of the weekend, which traders said was a normal
phenomenon.
They also said that investors were still monitoring how the
government would resolve the terrorist problem here and the
investigation process into the Marriott blast.
Any positive progress in the investigation should push the
stock index higher.
The Jakarta stock composite index slightly declined by 0.6
percent at 505.36 on Friday, but was still above the pre-blast
closing level of 503.94.
The main index rebounded 4.1 percent in the previous two
trading days after falling 3.1 percent on Tuesday, the day when
the Marriott blast happened. But dealers said that the two-day
rally was too quick particularly at a time when shares were
actually in a declining trend before the bomb blast occurred.
Gainers led decliners 89 to 41, with 69 stocks unchanged.
Volume was 1.3 billion shares valued at Rp 580 billion
(US$101.19 million).
Shares in market bellwether telecommunications firm PT Telkom
dropped 4 percent to Rp 4,250 on profit-taking after gaining 7.2
percent in the past two days.
Profit-taking also hit shares in cigarettemaker Hanjaya
Mandala Sampoerna, and carmaker PT Astra International.
Meanwhile, local retail investors continued to purchase cheap
second-line shares like cocoa producer PT Davomas Abadi and
forestry firm PT Cahaya Kalbar whose shares increased by 32
percent to Rp 245 and by 9.1 percent to Rp 240 respectively.