Rupiah firm but local stocks down

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)