Rupiah, stock market continue to stabilize

Rupiah, stock market continue to stabilize

JAKARTA (JP): The rupiah stabilized against the U.S. dollar at
the 5,000 level yesterday, while the stock market barely closed
higher.

Currency dealers said the rupiah was hovering between 4,950
and 5,300 throughout the day on ample liquidity in a thin market.

Spot rupiah closed at 5,000/5,200 in Jakarta against an
opening of 5,200/5,300.

Dealers said demand for the dollar remained high, but the
supply was beginning to improve as some local export-oriented
firms were seen unloading dollars.

"The dominant tone was looking good today (yesterday) as more
and more local corporations were seen selling dollars," a local
bank chief dealer said.

"If this supply continues, I believe the rupiah will break the
5,000 resistance level next week," the chief dealer said.

But local dealers called for intervention by the central bank
to trigger stop-loss limits because most local companies with
mounting foreign debt would face difficulties if they had to
purchase dollars at the 5,000 level.

The chairman of the Bakrie Group, Aburizal Bakrie, said
yesterday that companies under his group, and probably those
under other groups, would be comfortable with the rupiah rate at
between 4,500 and 4,000.

Local dealers said trading remained quiet due to the
approaching end of the year, and trading spreads were narrowing
further to between 100 and 200 points as operators calmed down
after recent volatility due to groundless speculation on
President Soeharto's health.

Various rumors still inundated the market, like one on
possible closures of more private banks after the government
revoked the licenses of 16 private banks earlier last month.

Bank Indonesia's credit director Mukhlis Rasyid said in a
statement that such baseless rumors were deliberately
disseminated by irresponsible people who wanted to create chaos
and benefit from it.

Mukhlis appealed to the public not be lured by such unfounded
rumors and rely on government policy and information.

"The public's calm is in the interest of all of us to restore
national economic stability," he said.

As the rupiah stabilized yesterday, stock prices on the
Jakarta Stock Exchange (JSX) scantly rose higher, with the JSX
composite index increasing 0.41 points to 378.76.

Total trade turnover was about 554 million shares in the
regular market valued at Rp 464.54 billion (US$92.9 million).

Brokers said a relatively strong rupiah had helped the stock
market defy regional weaknesses.

"I think it was the strengthened rupiah which pushed stock
prices up yesterday," Christina Lim of Harita Securities said.

Another analyst said the market was waiting for the government
to quickly take clear constructive action to help boost the
declining stock prices.

"Concerns over the President's health have declined, but the
promised constructive action by the government has yet to be
introduced," he said.

Most blue chip stocks ended mixed yesterday with state-owned
domestic telecommunications firm Telkom rising Rp 25 to Rp 2,700
and international telecommunications firm Indosat sliding Rp 250
to Rp 9,500.

Cigarettemaker Sampoerna closed up Rp 25 at Rp 4,150 and
competitor Gudang Garam rose Rp 50 to Rp 8,100.

Bank Internasional Indonesia dropped Rp 25 to Rp 350, Bank
Negara Indonesia remained unchanged at Rp 525 and Bank Dagang
Nasional Indonesia was unchanged at Rp 325. (aly/rid)

Currencies -- Page 11

Demand -- Page 12