Rupiah slides to 8,775 as local shares gain 1.4 percent

JAKARTA (JP): The local financial market closed mixed on Thursday, with the rupiah dipping further to 8,775 against the U.S. dollar while stock prices gained 1.4 percent.

Currency dealers said the rupiah closed slightly lower against the greenback in thin dealing, dragged down by the Japanese yen's bearishness, currency dealers said.

A dealer with a local private bank said some foreign investors -- after a few days off -- reentered the market, bidding for the dollar.

"They learned that the rupiah's relative strength, despite the drastic weakening of the yen, was unfounded," he said.

Before the Chinese New Year earlier this week, the yen traded at 114 to the dollar and the rupiah at 8,700. But with the yen at the 118 level, the rupiah is hovering at around 8,700.

"People expect the rupiah to follow the yen and weaken further," the dealer said.

The rupiah hit an intraday low of 8,850 in the morning, but bids for the dollar subsided in the afternoon and the rupiah clawed back to close at 8,775 -- down from Wednesday's close at 8,750.

Despite the rupiah's bearishness, stock prices on the Jakarta Stock Exchange (JSX) closed 1.4 percent higher on a technical rebound in selected large caps led by market leader PT Telkom, stockbrokers said.

The JSX Composite Index, the main local stock price gauge, closed 5.439 points higher at 403.414 on a volume of 82 million shares worth Rp 68.2 billion.

Gainers outnumbered losers 35 to 28.

Stockbrokers and analysts said the market built up momentum for a technical rebound after earlier falls, although liquidity was thin.

"The market was still below normal. Most people remained reluctant to trade as there was no regional guide due to the Lunar New Year break," a broker at BNI Securities said.

He noted that only 6,918 transactions were recorded on Thursday, half of the normal trading frequency level, and far from the precrisis level of some 40,000 transactions per day.

Bahana Securities associate director and head of equity sales, Andre Cita, said the slow trading on the local market was aggravated by the absence of any major positive news that could drive up the market.

"With the lack of fresh leads coming into the market, the market has been for most of the week mainly directionless, not much going on, very boring," he said.

He predicted that most short-term players would reenter the market next week.

Stockbrokers said the main price index managed to close higher on Thursday on the back of a rebound in some large caps, including domestic telecommunications firm PT Telkom, international call operator PT Indosat, tin miner PT Tambang Timah and food giant PT Indofood Sukses Makmur.

Telkom was up Rp 50 to close at Rp 2,900, Indosat was up Rp 275 at Rp 12,125, Tambang Timah was up Rp 225 at Rp 5,075 and Indofood was up Rp 175 at Rp 4,975. (rid)