Rupiah remain weak, stocks edge downward
JAKARTA (JP): The rupiah stayed weak at 14,000 against the U.S. dollar yesterday, while stock prices inched down on widespread security concerns, dealers and stockbrokers said.
Currency dealers said the rupiah fell to an intraday low of 14,200 against the dollar in early trade before ending at 14,000. It had closed Monday at 14,175, compared to 13,350 on Friday.
They said the rupiah failed to strengthen due to concerns over news on sporadic looting across the country and Habibie's "controversial" comments on the ethnic Chinese community in Indonesia.
"I think these are the two factors that are keeping the rupiah weak against the dollar," a chief dealer with a local private bank said.
President Habibie said in an interview with The Washington Post recently that the country's economy would survive even if ethnic Chinese entrepreneurs did not return to Indonesia because their roles would be taken over by other Indonesians.
Dealers said that such a statement would not help attract foreign investors to put their funds in the country's battered financial market.
Although the ethnic Chinese account for a small minority of the country's 202 million people, they play a significant role in the country's economy.
"Some foreign investors were confused after reading the statement and some of them laughed at such a statement," the chief dealer said.
Dealers said that reports on sporadic looting in Surabaya, East Java, also deflated any positive sentiment on the rupiah as foreign investors were in great fear over the country's security situation.
Dealers also attributed the weak rupiah to the possibility of rioting on Monday when thousands of supporters of Megawati Soekarnoputri, the ousted leader of the Indonesian Democratic Party, are expected to attend a rally in Central Jakarta to commemorate the second anniversary of the Indonesian military's takeover of her headquarters on July 27, 1996.
"People are still worried over such security problems in Indonesia," the dealer said while adding that the outlook for the rupiah remained gloomy in the short term.
Mirroring the negative sentiment on the rupiah, stock prices on the Jakarta Stock Exchange (JSX) failed to sustain gains as the main composite index fell 0.44 points to 488.23 yesterday.
Total turnover was 312.28 million shares on the regular market valued at Rp 468.74 billion (US$33.48 million).
A broker with Trimegah Securindo Lestari said speculative buying in late trading on certain selected stocks like Aneka Tambang, HM Sampoerna and Davomas Abadi prevented the benchmark index falling further.
The Trimegah broker said that massive buying on Aneka Tambang was triggered by its first-half net profit of Rp 251.8 billion this year compared to Rp 24 billion in the corresponding period last year.
Its share price closed Rp 25 higher at Rp 2,750 on 38.06 million shares changing hands yesterday.
Brokers said that large buying of cigarette maker PT HM Sampoerna was caused by the company's better-than-expected sales, which totaled 12.6 billion cigarettes, in the first halt of this year. Its share price closed Rp 275 higher at Rp 3,100 on a total turnover of 12.42 million shares.
Head of research at Sigma Batara Securities Fadjar Limin Sutandi said the local market had been overbought after it had made gains over the past weeks.
"My prediction is that the market will not break the resistance level of 490 points," he said.
"But if it can break the resistance level, the index could touch the 510-point level and the market will be bullish," he said. (aly)