Rupiah stagnant, stocks surge on foreign buying

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)