Rupiah stagnant, stocks surge on foreign buying

JAKARTA (JP): The rupiah remained stagnant while share prices continued to make gains yesterday over an unexpected incursion of buying orders from foreign investors, dealers and stockbrokers said.

They said the combination of the Frankfurt corporate debt agreement which came into affect yesterday with a recovery in the Japanese yen had also given the market much needed relief from weeks of battering.

Currency dealers said the rupiah was unchanged at 14,700 against the U.S. dollar at the close of the Jakarta market, exactly the same level as Tuesday's close.

They said demand for dollars at the current rupiah level was practically nonexistent because most local commercial banks had settled their foreign debt and trade finance arrears by June 30.

A dealer with a local bank said the market was unmoved by President B.J. Habibie's replacement of 41 members of the People's Consultative Assembly yesterday, saying investors saw it as a half-hearted move.

"The move failed to rouse the market since Mr. Habibie didn't remove Soeharto's children. Mr. Habibie even replaced outgoing members mostly with his own cronies," the dealer said.

Bank Indonesia governor Sjahril Sabirin called on politicians for help to stabilize the rupiah, noting that the currency would not stabilize if there was no stability on the political front.

Despite dormant trading in the currency market, share trading turnover on the Jakarta Stock Exchange (JSX) suddenly jumped to 413.07 million shares valued at Rp 427.57 billion (US$29 million), compared to a daily average of about Rp 150 billion over the last few weeks.

Stock prices advanced 2.4 percent, with the JSX Composite Index rising 10.621 points to touch a three month high at 456.541.

Stock prices gained 3.4 percent Tuesday.

Sigma Batara Securities' head of research, Fadjar Limin Sutandi, said the market was surprised by large buying orders placed by foreign investors at midday.

"There was really no big news in the market except sudden big buying orders by foreign investors. They might think that some of our quality stocks have become cheap," he said.

Fadjar Limin, however, warned that a couple of bulk buying nudges did not mean that the local bourse was bouncing back.

"I'm still quite pessimistic over projections of a market recovery because if these few buyers dumped their stock holdings, this would drag down the whole market," he said.

A stockbroker with another local securities house said local investors were still buying stocks of companies which promised to pay dividends.

Unlike in previous days, gainers yesterday led losers by 90 to 31, with 69 counters unchanged.

The market, however, was marred by a trading suspension on shares of PT Bank PDFCI as its prices rose 50 percent to Rp 150.

JSX's management announced yesterday it had suspended trading on PT Alumindo Perkasa, PT Modern Bank and PT Bank Umum Nasional because they failed to submit their 1997 financial reports on time.

The JSX has also suspended PT Semen Gresik since it was "in the final stages of selecting a strategic partner to buy part of the government's stake in the company."

Most large-cap stocks made gains and were traded quite heavily yesterday, with food giant PT Indofood Sukses Makmur of the Salim Group leading the list of most traded stocks gaining Rp 200 to Rp 1,650 on 37.1 million shares traded.

Heavyweight state-owned telecommunications firm PT Telkom rose Rp 25 to Rp 4,200 on 7.6 million shares traded, and satellite operator PT Indosat gained Rp 300 to Rp 17,500 on 599,500 shares.

Cigarette maker PT Gudang Garam climbed Rp 450 to Rp 9,150 on 1.45 million shares traded and competitor PT H.M. Sampoerna gained Rp 150 to Rp 2,175 on 12.75 million shares traded. (rid)