Rupiah fails to breach 11,000 level against dollar
Rupiah fails to breach 11,000 level against dollar
JAKARTA (JP): The rupiah ended slightly lower against the U.S.
dollar in quiet dealing yesterday, failing to breach the
psychological 11,000 level due to dollar-buying orders by
offshore operators, currency dealers said.
The negative sentiment in the rupiah affected the local stock
market with stock prices falling 1.6 percent on sustained selling
orders on certain large-capitalized stocks.
The rupiah, which opened weaker at 11,200 against the American
dollar, closed at 11,200/11,250 yesterday, slightly lower than
Wednesday's close of 11,100.
Dealers said that positive sentiment on the International
Monetary Fund (IMF)'s plan to immediately release its most-needed
bail-out funds for the country, did not last long as the market
had discounted it.
"Positive sentiment on the IMF loan was eaten up by massive
dollar-buying orders by offshore operators," a chief dealer with
a local private bank said.
He said that offshore operators, especially in Singapore,
placed whopping dollar-buying orders yesterday to benefit from
negative sentiment on the country's social and political
fronts.
News reports that angry mobs looted shops for food for a
second day in Wonosobo, Central Java, despite local police
warnings, drove the rupiah down further.
"News like this has really killed the buoyant sentiment on the
rupiah of the past few days," the dealer said.
Dealers said that even though state banks continued to sell
dollars for rupiah in a range of between US$30 million to $50
million, this failed to prop up the rupiah against the American
dollar.
Dealers said that rupiah's outlook for the rest of the week
would remain volatile because of more downward pressure coming
from the domestic political situation and regional bearishness.
The Jakarta Stock Exchange (JSX) fell 1.6 percent as
persistent selling pressures on blue chip stocks continued to be
weighed down by regional bearishness, stock brokers said.
The JSX Composite Index closed 5.98 points lower to a seven-
month low of 354.945 on a total turnover of 122 million shares
changing hands valued at Rp 223 billion (US$19.23 million).
Losers led gainers 65 to 22, with 75 stocks unchanged and 126
untraded.
Associate director of the state-owned securities house Bahana
Securities Andre Cita said that concerns over the inconsistency
of the government's privatization plan also upset many foreign
investors.
"Investors are worried that the government will not be able to
carry out its privatization program for this fiscal year," he
said.
In spite of this, state-owned cement producer Semen Gresik
ended Rp 675 higher at Rp 7,875 on 5.3 million shares traded on
the positive reaction that Mexico's Cemex SA, which is currently
holding talks with the government to buy a 14 percent stake in
the cement company, would buy more shares on the open market.
Cemex had won the first bidding stage to buy up to 51 percent
of Semen Gresik. The government, however, changed its divestment
plan for the cement producer due to public opposition.
Shares of international call operator PT Indosat dropped Rp
625 to Rp 7,975 and tin mining firm PT Tambang Timah's shares
also shed Rp 225 to Rp 5,775 on 65,000 shares traded.
Brokers also attributed the fall in stock prices to a change
of investors' investment pattern from the equity market to the
money market to benefit from a higher yield in Bank Indonesia's
one-month promissory notes.
"With an interest rate of 70 percent, some investors prefer to
put their funds in BI's one-month promissory notes than in the
stock market," a broker with Mashill Jaya Securities said. (aly)