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

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)