Rupiah, shares seen to remain stable this week

Rupiah, shares seen to remain stable this week

JAKARTA (JP): Indonesian currency and shares are expected to
remain stable this week despite concerns over the United States'
economy and potential global recession following the terrorist
attacks on the superpower's financial center last week, analysts
said.

Currency analyst Farial Anwar said the rupiah had stabilized
enough so that even major turmoil outside the country, such as
the terrorist attacks on the World Trade Center, put little
pressure on the currency.

Farial predicted on Saturday that the rupiah, which has been
relatively stable over the past two weeks, would hover between Rp
9,000 and Rp 9,200.

Despite the fact that major currencies, including the euro and
yen gained strength against the dollar in the wake of the U.S.
attack, the rupiah remained stable last week. On Friday, the
currency closed slightly stronger at Rp 9,100 in light trade
compared to Rp 9,130 the day before.

"I'm beginning to see that the currency has reached a stable
support wedge for the time being which should continue for the
week ahead," he told The Jakarta Post.

He noted however that traders would be anxious to see how the
New York Stock Exchange will go on Monday after a four-day
shutdown and the U.S. government's response to the attacks.

Farial however, warned of the grave impact on the global
economy in the wake of retaliatory action taken by the U.S.
against those responsible for the attacks.

Reports have said that the U.S is preparing to attack
Afghanistan, which is believed to be the hideout of Osama bin
Laden who is accused of being responsible for the killings.

"If America attacks Afghanistan or other countries in the
Middle East without sound evidence that they collaborated with
the terrorists, it will definitely trigger a full-scale
multidimensional crisis of international proportions," Farial
explained.

"We can imagine what would happen next. No investors would
then be willing to invest in the already isolated Indonesian
market for fear of revenge as Indonesia is the largest Moslem
country in the world."

"Let's just hope that's not going to happen," he said.

Meanwhile, the Jakarta Stock Exchange (JSX) Composite Index
closed lower on Friday at 425.65, as against 443.81 the week
before.

Stock analyst at BNI Securities Adrian Rusmana blamed the
attacks on New York and Washington as the reason behind the
slight decrease in the index.

"The index was heading in the right direction when the attacks
took place.

"If it were not for the attacks, the Composite Index would
have closed much higher than 425.65," Adrian said on Saturday.

However, Adrian said he was optimistic that stock markets
would rebound immediately after the U.S market resumes operations
on Monday.

"And I do not think America will launch attacks an any groups
or countries without proof that they are involved in the
terrorist attacks. World opinion will prevent that," he
reiterated.(10)