Rupiah steady as stocks fall nearly 1%
JAKARTA (JP): The rupiah closed slightly firmer at 8,900 against the U.S. dollar in very thin trading on Monday as share prices fell nearly 1 percent due to a lack of fresh leads in the local market.
Currency dealers said that the rupiah, which opened at 8,850/8,900 against the greenback, traded in a narrow range of between 8,850 and 9,000 on the day.
"While offshore operators, especially from Singapore, were selling dollars, local commercial banks were mostly on the buying side," a chief dealer with a joint venture bank said, pointing out that domestic dollar demand prevented the rupiah from advancing further against the U.S. dollar.
The rupiah closed at 8,900 against the greenback, slightly firmer than its 9,050 close on Friday.
Dealers said the passage of the electoral laws, meant to pave the way for the general election in June, gave a boost to the rupiah.
Nevertheless, dealers said bullish sentiment would not last long because the country was still plagued by both social and political tensions.
Market fears of spreading antigovernment demonstrations in the lead up to the election would further cast a shadow on the rupiah's prospects.
"We can only hope that antigovernment protests will not turn violent," another dealer said.
Unlike the rupiah, share prices in the local market closed slightly lower on Monday, weighed down by profit taking on telecommunications stocks such as state-owned PT Telkom and PT Indosat.
Nevertheless, stockbrokers said, trading remained dull on Monday as many investors maintained their wait and see attitude because of the bleak domestic political climate.
They said investors had no meaningful leads in the battered local market
"The market has run out of fresh incentives," Vonny Juwono, an institutional sales broker at PT Trimegah Securindolestari, said.
The Jakarta Stock Exchange (JSX) Composite Index fell 0.8 percent, or 2.82 points, to close at 409.11 on a total volume of 505 million shares valued at Rp 304.1 billion.
Decliners led advancers 38 to 32 with 84 stocks unchanged.
Sluggish
Stockbrokers and analysts said that the decline in regional equity markets was another important factor contributing to the sluggish sentiment of the local bourse.
"I don't see long-term investors coming into the market any time soon. I expect to see more short-term speculative trading," an analyst with BNI Securities, Fitri Murniati, said.
Stockbrokers said the increase of local telephone rates encouraged a massive buying of telecommunication stocks in the morning session before profit taking in late trading killed the buying mood.
Domestic telephone operator Telkom closed Rp 50 lower at Rp 3,250 with nine million shares changing hands, while international call operator PT Indosat fell Rp 150 to Rp 11,000 with 1.5 million shares being traded. (aly)