Rupiah steady but stocks down on profit taking
Rupiah steady but stocks down on profit taking
JAKARTA (JP): The fluctuating rupiah held steady yesterday,
but stock prices on the Jakarta Stock Exchange continued to
decline on profit taking and regional weaknesses.
The rupiah traded at around 14,000 against the U.S. dollar
throughout the day on a quiet market. The currency ended the
day's trading at 14,000/200, unmoved from Tuesday's close of
14,000.
A dealer with a local private bank said the rupiah was
supported by President B.J. Habibie's statement yesterday that he
would initiate a law to end discrimination against Chinese-
Indonesians.
"It's pretty quiet today. The jitters are over, and trading
was very slow. Maybe it's because of the promise from President
Habibie to end discrimination against ethnic Chinese here."
The market was jittery Monday following Habibie's comment in
an interview with The Washington Post, in which he downplayed the
need for Chinese-Indonesian businesspeople to return to the
country.
Dealers said the market was awaiting results of the
Consultative Group on Indonesia meeting in Paris at the end of
this month and implementation of the Indonesian Debt
Restructuring Agency.
"Indications so far are still positive. And we hope the impact
on our currency will also be positive," a dealer with another
local private bank said.
Stock prices were weighed down by the fall of other regional
markets and mounting concerns over a possible rise in the U.S.
interest rates, stockbrokers said.
They said the fall in regional markets was aggravated by U.S.
Federal Reserve chairman Alan Greenspan's testimony before the
U.S. Congress Tuesday, which raised fears of imminent interest
rate increases.
The JSX Composite Index fell 1.1 percent or 5.18 points to
483.05 on a total turnover of 395.43 million shares valued at Rp
546.40 billion (US$39.02 million).
Stockbrokers said profit taking on some blue chip stocks like
Telkom, Indosat and Tambang Timah, which account for around 30
percent of market capitalization in the local bourse, also pushed
the benchmark price index to fall further yesterday after making
gains over the past few days.
"Profit taking in some big-capitalization companies caused the
index to fall," a broker with Mashill Jaya Securities said.
Telkom's shares slipped by Rp 175 to close at Rp 4,350 on 2.14
million shares traded, Indosat by Rp 950 to Rp 15,900 on 64,500
shares and Tambang Timah by Rp 1,100 to Rp 8,900 on 1.42 million
shares.
Christina Lim, a director of Harita Kencana Securities, said
trading was quite active but it was mostly driven by rumors
rather than fundamentals.
"There is almost no trading based on companies' fundamentals
now, and most short-term investors buy stocks for speculation
only."
Analysts and brokers said that although trading activities had
increased over the past few weeks, rising concerns over the
country's social and political problems remained a big obstacle
for most investors.
Reports said hundreds of people burned vehicles, houses and
warehouses in the town of Porsea, North Sumatra, following a
dispute over logging with rayon company PT Inti Indorayon.
"Sporadic riots will only scare away potential investors,"
Christina said. (aly/rid)