Rupiah steady but stocks down further

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)