Rupiah remains stable, stocks lose ground
JAKARTA (JP): The rupiah maintained its stability yesterday on relative tranquility at home and regional stability, but local stock prices lost ground on the government's backtracking on its privatization plan.
Local currency dealers said the rupiah managed to hit an intraday high of 11,200 against the U.S. dollar in the morning session after state banks put dollars up for sale.
The currency hit 10,900 in Singapore.
"Some people were panicked so they sold their dollars to cut losses," a chief dealer with a local private bank said.
But the rupiah gave up its gains in afternoon trading as more operators bought back dollars, he said.
The rupiah ended the day trading at 11,700 against the dollar, compared to Wednesday's close at 11,600.
"The rupiah closed weaker because some investors bought back the dollar to square their positions ahead of the weekend," the chief dealer said.
Dealers said that even though some state banks continued to sell dollars for rupiah, their efforts failed to shore up the currency as the sums were very limited.
"A limited amount of dollar-selling by state banks was eaten up by increasing buying orders from so many investors," the dealer said.
Dealers said that with no rumors of fresh riots, the rupiah was expected to test the 11,000 level in the coming days, with support from state banks and possibly the central bank.
As the rupiah stabilized, stock prices on the Jakarta Stock Exchange (JSX) fell 1.62 percent, weighed down by a massive selloff of blue chips stocks.
The JSX Composite price index fell 6.56 points to 399.33 on a total turnover of 231.52 million shares changing hands valued at Rp 287.55 billion (US$24.35 million)
Losers led gainers by 60 to 40, with 83 shares unchanged.
Head of research of Mashill Jaya Securities Edhi S. Widjojo said that even though there were no fresh reports on social unrest in the country, the lower-than-expected first-half results of most listed companies in the local market prompted investors to dump the stocks.
"With no positive news in the market, some investors are taking a wait-and-see attitude and others continued dumping the stocks," he said.
Heavyweight telecommunications firm PT Telkom, which accounts for 17 percent of market capitalization, fell Rp 125 to close at Rp 3,075 on 27.98 million shares traded.
Investors dumped state-owned Telkom after it reported a net loss of Rp 1.17 trillion (US$100 million) in the first half of this year, mainly due to foreign exchange losses.
Another state-owned telecommunications firm, PT Indosat dropped Rp 625 to Rp 10,175 on 570,000 shares.
A broker with Trimegah Securindo Lestari said that poor financial results in the first half of this year coupled with news on the delay of the privatization program of state-owned companies had caused a negative sentiment to pervade the market.
"News that the government will delay the privatization program of state enterprises sent a negative sentiment to the stock market," the broker said.
The government announced yesterday that the government would retain its controlling stake at the country's largest cement maker PT Semen Gresik.
Semen Gresik nosedived Rp 1,250 to Rp 8,750 on 2.27 million shares changing hands.
Other state listed firms which led the market a few weeks ago due to various privatization issues, especially tin miner PT Tambang Timah and general mining firm PT Aneka Tambang, also felt the brunt of market anger.
Tambang Timah fell Rp 325 to Rp 6,925 on 517,000 shares traded, and Aneka Tambang declined Rp 75 to Rp 2,075 on 6.43 million shares. (aly)