Rupiah stays at 10,000 level but stocks fall
JAKARTA (JP): The rupiah managed to stay relatively unchanged at 10,000 level to the U.S. dollar on Thursday despite several other regional currencies losing ground.
The rupiah ended slightly weaker at 10,775 against the greenback, compared to Wednesday's close of 10,750.
But share prices in Jakarta continued to weaken, with the main price gauge falling almost 1 percent on the back of Wall Street's overnight fall and selling pressure on certain blue chip stocks, brokers said.
Currency dealers said that rupiah trading was barely moderate as most market players had moved to the sidelines of the local financial market.
"Trading activities are so thin and dull," a dealer with a joint venture bank said, adding that the total value of transactions was between US$60 million and $70 million.
The dealer said that a 3 percent cut in the interest rate of Bank Indonesia's short-term notes to around 64.74 percent on Thursday from 67.43 percent the previous week did not affect the rupiah.
"Market players are not keen about speculating on the rupiah anymore," he said.
Dealers said the rupiah maintained its 10,000 level partly due to dollar-selling by several state banks, like Bank Bumi Daya (BBD) and Bank Dagang Negara (BDN).
But most dealers said that sentiment over the rupiah in the coming weeks would be bleak as lingering fears about political and social instability at home would put pressure on it.
Unlike the rupiah, stock prices on Jakarta Stock Exchange (JSX) closed almost 1 percent lower with the main price index falling 2.29 points to 273.86 on a total turnover of 137.90 million shares changing hands valued at Rp 130.47 billion (US$12.1 million).
Losers led gainers 52 to 31 with 69 stocks remaining unchanged.
Stock brokers said that a 2.9 percent fall in Wall Street on Wednesday had weighed heavy on local market sentiment with most foreign investors dumping telecommunications and mining blue chip stocks.
"I think there are no fresh leads at all in the market to boost investors' sentiment," a broker with Trimegah Securindolestari said.
She said that most foreign investors remained on the selling side for the whole trading day, discarding most blue chip stocks which account for a large proportion of market capitalization on the hammered bourse.
Antonio Yongnata, an institutional sales director of Mashill Jaya Securities said that investors were still cautious over the country's political situation which saw no signs of recovery in the near future.
"Though there are no demonstrations in the capital, investors are still worried,' he said.
Brokers said the dire economic situation coupled with unresolved political instability at home would not be able to tantalize foreign investors to enter the local battered market.
"it is just too bad that there has been no good news at all to work with over the past few days," associate director of Bahana Securities Andre Cita said.
Most blue chip stocks, which determined the movement of the local market, declined Thursday with state telecommunications firm PT Telkom falling Rp 50 to Rp 1,475 on 10.91 million shares traded, international call operator PT Indosat shed Rp 125 to Rp 5,650 on 289,000 shares, pulp and paper producer PT Tjiwi Kimia slid Rp 25 to Rp 975 on 2.91 million shares and mining firm PT Tambang Timah falling Rp 150 to Rp 4,525 on 1.15 million shares changing hands. (aly)