Rupiah lets gains slip, stock prices lose more ground
Rupiah lets gains slip, stock prices lose more ground
JAKARTA (JP): The rupiah failed to sustain gains from earlier
in the week against the U.S. dollar yesterday, closing slightly
lower in moderate trade due to the weak yen and market concerns
over China's possible devaluation of the yuan.
Currency dealers said movement of the yen, which
significantly dictated the direction of all regional currencies,
was a determinant factor in the rupiah's slide yesterday.
The rupiah, which traded in a range between 12,650 and 12,850
against the American dollar, ended at 12,800 in the Jakarta spot
market, slightly lower than its 12,700 close the previous day.
"I think the weakening yen caused the rupiah to fall against
the dollar. If the yen had not been so weak, the rupiah might
have broken the 12,500 level," a chief dealer of a local private
bank said.
Some dealers had speculated the rupiah would break the 12,500
psychological level yesterday.
The rupiah lost the support from state banks which bought the
currency during the last few days, dealers said.
"Since there were no dollar selloffs by state banks yesterday,
the rupiah failed to gain ground," a dealer with another private
bank said.
Dealers said absence of any fresh leads in the market combined
with market concerns over a possible rally ahead of the
commemoration of the country's independence day on Aug. 17 would
likely sour the market sentiment.
"While the country is struggling to solve its political and
security problems, concerns about another social outbreak prior
to Aug. 17 is escalating," a dealer said.
"Just wait until next week. If there is another major
demonstration or even social riots, the rupiah will surely tumble
again, but if not the unit will continue to make headway."
Falling in line with the rupiah's slide, stock prices on the
Jakarta Stock Exchange (JSX) continued to lose ground, sparked by
panic selling by some investors ahead of weekend, stockbrokers
said.
The JSX Composite Index fell 2.4 percent or 10.22 points to
423.61 on a total turnover of 433.83 million shares changing
hands valued at Rp 273.87 billion (US$21.39 million).
Stockbrokers and analysts said the sluggish condition in the
country's battered market caused the daily trading transaction
value to drop drastically by almost 70 percent to about Rp 200
billion, compared to Rp 600 billion during the precrisis period
last year.
"This bearish sentiment coupled with the shunning by foreign
investors has forced our market to tumble further," an analyst
with local securities house said.
Brokers said bearish sentiment in the regional market
infiltrated the local market, and most offshore institutional
investors unloaded their portfolio investment.
"There was nothing special today (yesterday), most foreign
institutional investors continued to dump the blue chip stocks
they bought the previous weeks," said Antonio Yongnata, an
institutional sales manager of Mashill Jaya Securities.
Other brokers agreed, saying that massive selloffs in
telecommunication stock PT Telkom and PT Indosat, state general
mining firm PT Aneka Tambang and pulp and paper producer PT Tjiwi
Kimia had caused the main price index to fall.
The stock price of Telkom fell Rp 25 to Rp 3,600 on 9.77
million shares yesterday, Indosat shed Rp 900 to Rp 11,100 on
702,000 shares, nickel producer PT Aneka Tambang dropped by Rp
100 to Rp 2,250 on 2,94 million shares yesterday while pulp and
paper producer Tjiwi Kimia fell Rp 225 to Rp 2,200 on 1.89
million shares. (aly)