Rupiah steady but stocks down further
JAKARTA (JP): The rupiah remained steady at 7,450 against the U.S. dollar on Friday, but stock prices in the local exchange continued declining.
Currency dealers said the rupiah, which opened at 7,300, rose to an intraday high of 7,250 during midday trading due to heavy dollar-selling by offshore operators across the region.
They said that market participants, especially from Singapore and Hong Kong, unloaded their dollar holdings for rupiah.
"Overseas operators wanted to square their position," a chief dealer with a local private bank said.
Dealers said, however, that an unexpected dollar bid by state banks in late trading drove the rupiah down to end the week at 7,450.
"I think the state banks bought dollars for their customers to settle their overseas debts or to finance imports," the dealer said, pointing out that trading volume had significantly declined now.
In the past several days, state banks were seen actively selling dollars -- a move which analyst said was made on behalf of Bank Indonesia, the central bank, to prop up the rupiah.
"The rupiah is expected to advance to the 7,000 level to the dollar next week," another dealer said.
Unlike the rupiah, share prices on the local shattered market fell nearly 1 percent on Friday due to persistent profit taking on big capitalized stocks which booked gains the previous days.
The Composite Index, the main price gauge on the Jakarta Stock Exchange, fell 2.35 points to 392.32, with 410 million shares worth Rp 288.81 billion (US$38.76 million) changing hands.
Decliners outpaced gainers by 60 to 37 with 88 stocks remaining unchanged.
Brokers said the fall of some regional equity markets coupled with massive profit taking on most blue chip stocks had weighed down market sentiment in the local bourse.
"But on top of that, profit ahead of the weekend was behind the decline of the local market," Vonny Juwono, an institutional sale broker with Trimegah Securindolestari, said.
Head of research of Sigma Batara Fadjar Limin Sutandi said that global and regional funds, which entered the local bourse last week, were no longer tempted to stay in the battered market due to lingering and economic uncertainty in the country.
Trimegah's Vonny said foreign brokerage firms, which put in more selling orders to cash in profits on Friday, included Jardine Fleming, ING Barings Securities and ABN Amro.
But she said other foreign investors continued to place more buying orders through WI Carr Securities Indonesia, Credit Lyonnais Indonesia and Merryl Lynch Indonesia in the local exchange.
Several blue chip stocks ended lower, with state international call operator PT Indosat sliding Rp 250 to Rp 10,900, pulp firm PT Tjiwi Kimia shed Rp 50 to Rp 1,650 and mining firm PT Aneka Tambang fell Rp 25 to Rp 1,650. (aly)