Rupiah remains firm, stocks rise slightly
Rupiah remains firm, stocks rise slightly
JAKARTA (JP): The rupiah failed to continue its rally against
the U.S. dollar on Tuesday, closing at 7,400, similar to its
close on Monday, currency dealers said.
Currency dealers said that most market participants were
reluctant to build any position in the run-up to the special
session of the People's Consultative Assembly (MPR), which is
scheduled for Nov. 10 to Nov. 13.
"Some operators were reluctant to unload their dollar holdings
ahead of the meeting," a chief dealer with a local private bank
said.
He said that offshore and local operators who had built a long
dollar position at 12,000 and 13,000 were unwilling to sell their
dollars at the rupiah's current level of around 7,000.
Currency dealers said that trading on the rupiah was quiet on
Tuesday following a rally which pushed the rupiah up to an
intraday high of 7,300 on Monday, following reports that the
Indonesian government was considering the reintroduction of an
intervention band to limit fluctuation in the rupiah exchange
rate.
"Trading activities remained dull because there was no fresh
leads to swing trading sentiment," the dealer said.
The rupiah was traded within a narrow range of 7,350 to 7,750
to the dollar on Tuesday.
Bank Indonesia Governor Sjahril Sabirin said on Tuesday that
the rupiah would likely hold onto its gains in the days ahead as
the country's economy had shown signs of recovery.
He declined, however, to give an ideal level for the rupiah-
dollar exchange rate.
Last week Sjahril expressed optimism that the rupiah still had
potential to advance to between 6,000 and 6.500 against the
American dollar.
But currency dealers said that movement on the rupiah would
likely depend on how the Japanese yen fared against the American
dollar in the coming days.
The Japanese yen closed its Asian trading at 119.59 on
Tuesday, lower than its Monday's close at 119.10.
"If the yen breaks through the 120 level to the dollar, then
the rupiah will come under severe pressure," another dealer said,
adding out that he expected the rupiah to be traded in range of
between 7,200 and 7,700 on Wednesday.
Share prices in the local market closed slightly firmer on
Tuesday because some investors bought certain blue chip stocks
which declined on Monday.
"But trading activities remained dull," an institutional sales
broker with Trimegah Securindolestari said.
The Jakarta Stock Exchange (JSX) Composite Index rose 2.79
points to 318.10 on a total turnover of 134.13 million shares
valued at Rp 132.92 (US$17.96 million).
Edhi S. Widjojo, an analyst with Mashill Jaya Securities said
that investors remained afraid to enter the country's shattered
bourse due to lingering uncertainties in the country's political
environment.
"The country's political risk is still high and this has
prompted investors to continue shunning the market," he said.
Trimegah's broker said that several foreign brokerage firms
including Jardine Fleming Nusantara and Vickers Ballas Tamara
placed more selling orders than buying orders on Tuesday.
"It shows that foreign investors are still worried about our
market here," the broker said.
Stock prices for mining firm PT Tambang Timah rose by Rp 100
to Rp 4,500 with 579,500 shares changing hands, PT Telkom rose by
Rp 50 to Rp 2,075 with Rp 6.86 million shares traded, and
international call operator PT Indosat shares rose by Rp 225 to
Rp 8,175 on 319,500 shares changing hands. (aly)