Rupiah stay steady as stocks lose ground on profit taking
JAKARTA (JP): The rupiah was steady at Rp 7,500 against the U.S. dollar in very thin dealing on Monday as stocks shed 1.5 percent, currency dealers and stockbrokers said.
Dealers said the rupiah appeared to be stable -- despite increasing political tensions at home -- because offshore players steered clear of the currency.
A dealer at Bank Niaga, Robert L. Toruan, said offshore participants, who had been in the forefront of attacking the rupiah in the past few months, did not want to build any new position.
"All they want now is to square their positions before year's end," Robert said.
The rupiah was traded in a range between 7,400 and 7,500 to the dollar for the whole trading day. The local unit closed at 7,500, a bit weaker from Friday's close of 7,450.
Niaga's Robert said daily anti-government demonstrations by students had become a common sight in Jakarta and this would not affect the currency any more.
He said the rupiah's fate would be decided very much by the supply and demand for dollars in the market.
Some dealers predicted that the rupiah would advance to the 7,000 level against the dollar in the coming weeks as the International Monetary Fund would likely disburse the next US$1 billion loan for Indonesia in the first half of this month.
Bank Indonesia is expected to step into the market by converting its dollar loan into rupiah.
Like the rupiah, share prices on the local stock market fell 1.5 percent on Monday as foreign investors continued to stay away from the local market due to the absence of the fresh leads at home.
The Jakarta Stock Exchange (JSX) Composite Index plunged 6.04 points to 386.27 on a total turnover of 249.34 million shares changing hands valued at Rp 193.91 billion.
Losses led gains by 57 by 34, with 90 stocks unchanged.
Stockbrokers and analysts said that sustained profit taking in several blue chip stocks had contributed to the decline of stock prices in the battered bourse.
"Profit taking and decline in some regional markets weighed down sentiment in the local market," said Vonny Juwono, an institutional sales broker with Trimegah Securindolestari.
She said that foreign brokerage firms such as Jardine Fleming Nusantara and Merrill Lynch Indonesia continued to discard stocks which they bought the previous week.
Despite so, Vonny said that certain foreign brokerage firms like ING Barings and Credit Lyonnais Capital Indonesia placed more buying orders on Monday.
Analysts said the recent rebound in the local market was supported by the entrance of international funds following rate cuts in major economies, notably in the U.S. and some European countries.
Their entrance boosted trading on the local market, sending the main price index past the 400 level on Monday last week.
But Fitri Murniati, an analyst with BNI Securities, said some investors found no reason to reenter the market on Monday.
"People will only enter the market if they find some fresh leads there. Otherwise, they would remain on the sidelines," she said.
Large-cap stocks ended mixed on Monday, with market-leading state-owned telecommunications firm PT Telkom unchanged at Rp 2,725 on 3.46 million shares traded. (aly)