Rupiah stable, stocks bounce 1.6 percent
Rupiah stable, stocks bounce 1.6 percent
JAKARTA (JP): Indonesia's financial markets remained stable on
Thursday with the rupiah closing slightly lower at 10,900 against
the U.S. dollar but stocks rising 1.6 percent.
Currency dealers said the rupiah fluctuated above the 10,000
level to the U.S. dollar in moderate dealing as most market
operators avoided taking long positions on the currency.
Dealers said that offshore operators, especially from
Singapore, did not make any big orders because they were closely
watching on the development of the Malaysia's move to control the
foreign exchange trading.
"Rupiah trading is very quiet as market participants are
watching the Malaysian ringgit closely," a chief dealer with a
local private bank said.
The rupiah, which opened at 10,850/10,950, closed slightly
lower at 10,900 against the American dollar compared to
Wednesday's close of 10,850,
Dealers said the lackluster rupiah trading was suffocated by
concerns about escalating social unrest triggered by soaring
prices of basic commodities despite dollar selling by state banks
to prop up the currency.
"We have seen state banks continue to sell dollars over the
past few days but this failed to improve the rupiah's position
on Thursday," the dealer said, adding the dollar selling was
between US$10 million and $20 million Thursday.
Dealers said the rupiah was expected to resume its rise on
Friday to break the 10,500 level.
Stocks on Jakarta Stock Exchange (JSX) rose 1.6 percent on
technical buying sentiment by short-term investors on certain
selective stocks which had been oversold in the past few weeks.
The JSX Composite Index rose 5.16 points to 334.78 on a 212.81
million shares valued at Rp 289.64 billion (US$26.57 million).
Gainers outpaced losers 47 to 42 with 63 shares unchanged.
Stock brokers said the bull run on certain agricultural stocks
following the government's decision to scrap import duties for
some basic commodities slightly improved overall buying sentiment
on Thursday.
"But the slight increase is just a technical rebound after
losses in the past few weeks," an institutional sales broker with
Trimegah Securindo Lestari said.
Head of research at Vickers Ballas Tamara Securities Noraya
Soewarno said that regional market distress coupled with the high
interest rates at home posed a big dilemma for portfolio
investors debating whether to enter the equity market.
"Investors prefer to put their funds in fixed income
instruments which provide higher yields," she said pointing to
Bank Indonesia's 70 percent auction rate for its one-month
promissory notes.
Brokers said, however, that the overall sentiment remained
somber as investors continued to discard second and third-line
stocks.
"Even if there is buying sentiment, it is merely for the
short-term ... and it does not reflect the recovery of the
market," Vickers Ballas' Noraya said, pointing out that political
uncertainties at home were also responsible for the sluggish
market.
Trimegah's brokers said that market speculation that the
instant noodle producer PT Indofood Sukses Makmur had signed a
deal with a Japanese investor to acquire one of its business
units had sparked massive buying orders for the stock on
Thursday.
The stock price of Indofood rose Rp 375 to Rp 2,025 on a total
turnover 73.71 million shares.
Plantation firm Astra Agro Lestari rose Rp 150 to Rp 1,975 on
3.83 million shares while PT London Sumatra Indonesia was up Rp
175 Rp 1,225 on 22.99 million shares changing hands. (aly)