Rupiah firm but local stocks down
JAKARTA (JP): The rupiah ended the week by holding steadfast at 7,525 against the U.S. dollar on Friday, but share prices shed 0.8 percent as the local stock market's topsy-turvy fortunes continued.
Currency dealers said the rupiah, which slid to 7,550 on Thursday, failed to gain steam on Friday because fresh dollar demand by several state banks capped its upward movement.
Dealers said the banks, which were seen unloading their dollar holdings for the rupiah on previous days, placed moderate dollar orders on Friday.
"This has kept the rupiah at 7,500," a chief dealer with a local private bank said.
Currency dealers said offshore players barely entered the local currency market because they were still concerned about the unsettled political climate.
Hundreds of students staged another protest at the Merdeka presidential palace on Friday to air their demands, including the trial of the former president Soeharto.
Dealers said the country's escalating political risk posed a big problem for market operators, causing daily trading volume to drop significantly to about US$100 million, compared to its volume of around $10 billion prior to the crisis last year.
"Most foreign operators are in the consolidation process in the lead-up to the year-end," another dealer said.
The Jakarta Stock Exchange Composite Index closed down 3.40 points at 390.39 on total turnover of 231.46 million shares valued at Rp 215.03 billion.
Despite the fall in the main price gauge, gainers outnumbered decliners by 47 to 45, with 82 stocks unchanged.
Stockbrokers attributed the fall to a combination of persistent profit taking on particular blue-chip stocks and bearishness in regional equity markets following a 2 percent fall in Wall Street.
"Since our market has run out of fresh leads at home, the fall in regional markets has negatively affected the market sentiment in the local bourse," said Vonny Juwono, an institutional sales broker with Trimegah Securindolestari.
She said that although some foreign brokerages like Merrill Lynch Indonesia and GK Goh Ometraco placed more selling than buying orders, other offshore firms including SBC Warburg, Credit Lyonnais and ABN Amro were on the buying side.
Antonio Yongnata, a sales manager with Mashill Jaya Securities, noted that most investors shunned the local hammered bourse due to lingering uncertainty on the country's political and economic fronts.
"Foreign fund managers will only be tempted to enter a certain market if there is political stability," he said.
Several blue-chip stocks declined, with mining firm PT Aneka Tambang sliding by Rp 75 to close at Rp 1,650 on 4,91 million shares traded.
Cigarette maker PT HM Sampoerna shed Rp 300 to Rp 5,100 on 3.35 million shares, and competitor PT Gudang Garam gained Rp 125 to Rp 9,8000 on 171,000 shares.
Heavyweight state-owned telecommunications firm PT Telkom gained Rp 25 to Rp 2,725 on 5.5 million shares traded, and state- owned international call operator PT Indosat lost Rp 350 to Rp 10,450 on 283,000 shares. (aly)