Rupiah stable, shares down on regional weakness

Rupiah stable, shares down on regional weakness

JAKARTA (JP): The rupiah was stable against the U.S. dollar
yesterday despite a regional weakness which pulled down local
share prices, dealers and stockbrokers said.

Currency dealers said domestic factors seemed to have a more
significant influence on the rupiah due to the thin volume of
trading and because offshore operators avoided the currency
because of its high risk.

They said the election of Akbar Tandjung to the top post in
the ruling Golkar functional group had mitigated the impact of
the yen's fall on the rupiah.

"The rupiah was relative stable today (yesterday) although
most regional currencies weakened, tracking down the yen's fall
against the dollar," a dealer with a local private bank said.

The rupiah closed at 15,150/250 against the dollar on the
Jakarta spot market, up from its low of 15,400. The currency
closed at Rp 15,250 to the dollar on Friday.

"The market was quite happy with the victory of Akbar, which
should ensure completion of the reform program under President
B.J. Habibie."

Akbar, who was widely perceived as Habibie's nominee, beat
former minister of defense and security Edi Sudradjat, who had
the support of a number of retired generals, in a vote held last
Saturday.

However, the relative stability of the rupiah limited the
correction in most blue chip stocks on the Jakarta Stock Exchange
(JSX) yesterday, stockbrokers said.

The JSX Composite Index closed down 3.908 points at 459.673.
Trading turnover yesterday was 175.29 million shares valued at Rp
202.49 billion (US$13.3 million). Losers led gainers by 45 to 36,
with 94 stocks remaining unchanged.

Analysts said the setback for the ruling Liberal Democratic
Party in Japan's Upper House elections on Sunday had affected
sentiment on the local bourse.

"It's regional factors which pulled down our market," Goei
Siauw Hong, head of research at Socgen-Crosby Indonesia, said.

He noted that news about the LDP's electoral defeat had
prevented investors from taking a firm buying position on most
regional markets, including Indonesia.

Besides, he said, the local bourse was still overrun by profit
taking, especially on large-cap stocks.

Shares in heavyweight state-owned domestic telephone monopoly
PT Telkom were unchanged at Rp 4,350 on 5.26 million shares
changing hands, while shares in state-owned international call
operator PT Indosat fell Rp 800 to Rp 17,000 on 17,500 shares
traded.

Shares in state-owned cement maker PT Semen Gresik also
dropped Rp 150 to Rp 11,150 on 240,500 shares traded.

Semen Gresik's share price rose last week after the government
named Mexico's Cemex SA as the preferred bidder for a 35 percent
stake in the company.

Semen Gresik, Telkom and Indosat are among the 12 state-owned
companies in which the government plans to sell-off all or part
of its stake.

Gold and nickel mining company PT Aneka Tambang - which is
also on the list for privatization - rose Rp 125 to Rp 2,175 on
20.39 million shares traded.

Aneka Tambang shares rose on the back of market rumors that
the government had found a foreign operator willing to buy its
stake in the company at a reasonable price, brokers said.

Shares in cigarette giant PT Gudang Garam fell Rp 100 to close
at Rp 8,350 on 419,000 shares traded and shares in rival producer
PT HM Sampoerna recovered by Rp 100 to close at Rp 2,375 on 5.95
million shares traded.

Analysts said the market could slow down as it awaits the
disbursement of a US$1 billion loan from the International
Monetary Fund, which is expected later this week.

However, further announcements on the government's
privatization plans should encourage investors to speculate on
state firm stocks, they said.

Besides, they added, the local market could also be spurred by
speculative buying on second-line stocks with good prospects.
(rid)