Rupiah slips to 7,850 as stocks slightly up

JAKARTA (JP): The rupiah slipped further to close at 7,850 against the U.S. dollar in extremely quiet dealings on Thursday, with most banks closing their dealing rooms earlier than usual, currency dealers said.

But stock prices on the local market edged up 0.3 percent, supported by buying programs on certain second- and third-line stocks, brokers said.

Currency dealers said that the rupiah, which closed at 7,825 on Wednesday, was almost unmoved on Thursday as most market participants were on their Christmas and year-end holidays.

A chief dealer with a joint-venture bank said, "There were virtually no trading activities right after the lunch break."

Dealers said that some state banks were active in bidding dollars either to settle their offshore obligations or finance their customers ahead of the year end.

"We do not know the purpose of buying dollars but they seem to be financing the country's food imports ahead of the holiday," the dealer said.

The country's financial markets will be closed Friday and will reopen on Dec. 28.

Dealers said that trading activities were expected to be quiet as most participants were still on their year-end break until January next year.

But unlike the rupiah, share prices on the local market climbed 0.3 percent on Thursday, with the Jakarta Stock Exchange (JSX) Composite Price index closing 1.34 points firmer to 401.85 on a total turnover of 105.13 million shares valued at Rp 80.76 billion.

Gainers led losers by 45 to 24 with 80 stocks remaining unchanged.

Stockbrokers said the trading volume had subsided on Thursday with most traders already having left the trading floor much earlier than the usual time.

Imelda Kwan, an institutional sales broker with Trimegah Securindolestari, said, "We have anticipated such thin trading because most people are on holiday."

A BNI securities analyst, Fitri Murniati, said on Thursday that trading had declined sharply on Thursday and would decline further ahead of the year's end as most investors were on their year-end break.

"The market has anticipated such a decline in trading volume," she said, pointing out that investors were expected to enter the local market in early January, next year.

Imelda said the absence of foreign investors on the local hammered market, due to lack of fresh incentives, was expected to be sustained until early January, 1999.

Brokers said the main price gauge was expected to sink below the 400-key points level ahead of the year's end.

"The main price index will likely support its level of 380," Imelda said. (aly)