Rupiah stays put but stocks up 2.38 percent on bullish sentiment
Rupiah stays put but stocks up 2.38 percent on bullish sentiment
JAKARTA (JP): The rupiah ended unchanged at 7,450
against the U.S. dollar in thin trading on Wednesday but stock
prices gained ground to close 2.38 percent higher.
Currency dealers said market participants were almost absent
from the local currency market, leaving the rupiah to be traded
in the very narrow range between 7,400 and 7,550.
"The market is dull, there are almost no trading activities as
most operators have stayed clear of the market," a chief dealer
with a local private bank said.
The rupiah remained steady at the 7,000 level against the
greenback despite reports of increasing antigovernment protests.
About 1,000 university students took to the streets again on
Wednesday in three separate rallies near the military
headquarters building, the Attorney General's Office and the
residence of former president Soeharto, who was toppled following
the bloody riots in May this year.
Students have stepped up protests near Soeharto's house on Jl.
Cendana in Central Jakarta in the past few days to demand that he
be prosecuted for his alleged abuse of power in the past three
decades.
Currency dealers said market participants, who in past months
took advantage of the country's political and social uncertainty
to attack the rupiah, steered clear of the market again on
Wednesday.
"Most market participants do not want to build any new
position ahead of the year-end holiday," another dealer said.
Dealers said political turmoil and violent outbreaks sweeping
the country in recent weeks had failed to dampen market sentiment
on the rupiah, which hit the 7,000 level early last month for the
first time since January this year.
Financial analysts said the rupiah's rally was supported by
falling inflation and a steady stream of bailout funds from the
International Monetary Fund (IMF). Some of the funds were
converted to rupiah to finance the social safety net program,
thereby improving the dollar liquidity in the local money market.
Bank Indonesia Governor Sjahril Sabirin said in Hong Kong on
Tuesday that the rupiah still had room to advance to 6,500 in the
coming days.
"There's room for it to strengthen a bit further, to a level a
little bit below 7,000 or 6,500," he said.
Taking the lead from the rupiah, stock prices on the local
market edged up 2.38 percent on Wednesday, driven by the increase
in telecommunication stocks which account for a 25 percent stake
in the market capitalization.
The Jakarta Stock Exchange (JSX) main composite index rose
9.22 points to close at 396.96, with 291.31 million shares valued
at Rp 287.78 billion (US$32.05 million) changing hands.
Gainers outnumbered losers by 76 to 19 with 77 stocks
unchanged.
Stockbrokers attributed the rise in share prices to bullish
sentiment in the regional market and the overnight increase on
Wall Street.
"The increase in share prices tend to benefit from bullish
sentiment in other regional markets," said Vonny Juwono, a sales
broker with Trimegah Securindolestari.
She said that investors remained concerned that escalating
student demonstrations, and the fear they could be more
tumultuous in the coming days, would weigh down market sentiment
in the already beleaguered bourse.
However, some foreign brokerage firms including ING Barings
Securities, ABN Amro and GK Goh Ometraco placed more buying
orders while Jardine Fleming Nusantara, Merrill Lynch Indonesia
and Credit Lyonnais Capital Indonesia continued to discard stocks
they bought on previous days, she said.
"At least we are still seeing some foreign investors entering
the market," Vonny said.
Telecommunications firm PT Telkom rose Rp 125 to Rp 2,825 on
15.95 million shares changing hands, pulp and paper company Tjiwi
Kimia climbed Rp 75 to Rp 1,775 on 11.66 million shares, car
manufacturer Astra International rose Rp 50 to Rp 1,075 on 14.46
million shares and Indosat accrued Rp 450 to close at Rp 11,200
on 1.02 million shares changing hands. (aly)