Rupiah, stocks down on regional weakness

Rupiah, stocks down on regional weakness

JAKARTA (JP): The rupiah and local stock prices ended down
yesterday over regional weaknesses and profit taking after a few
days of successive gains on positive news about Indonesia's
donors' meeting.

Currency dealers said the rupiah slipped to 13,100/200 against
the U.S. dollar at the close of Jakarta trading, compared to
Thursday's close of 13,000.

They said the weakening of the rupiah was especially driven by
most operators' move to sell rupiah to square their position as
they had gone long on the currency days before Indonesia's donors
pledged at their meeting in Paris to loan Indonesia US$7.9
billion this fiscal year.

"Today (yesterday), most players were selling rupiah to square
their position ahead of the weekend after keeping their long
rupiah position for quite some time," a dealer with a state bank
said.

Dealers said the rupiah was also following the Japanese yen,
which fell below 144 against the dollar yesterday.

They said the market did not bow down to bullish words from
Coordinating Minister for Economy, Finance and Industry Ginandjar
Kartasasmita that the government would use some of its foreign
loans to buy rupiah to bring it up to 10,000.

Intervention

The state bank dealer warned that the government should not
conduct futile intervention, like what it did a few weeks ago,
especially in considering the current political uncertainties and
widespread social and security concerns.

"If it does intervene now, it would be the speculators who
would benefit," he said.

He said the market was anticipating more social unrest ahead
of the anniversary of Indonesia's independence later this month.

Stock prices on the Jakarta Stock Exchange (JSX) lost ground,
with the JSX Composite Index inching down 0.971 points to close
at 481.71.

Trading turnover totaled 216.99 million shares changing hands
on the regular market valued at Rp 251.23 billion (US$19.1
million).

Losers outnumbered gainers by 54 to 33 with 112 stocks
remaining unchanged and 79 others untraded.

Stockbrokers and analysts attributed the slight fall to
regional weakness and profit taking by investors on certain
stocks which had made big gains prior to the conclusion of the
Consultative group on Indonesia (CGI) meeting in Paris.

"Though the aid commitment by the CGI was positive, the
Japanese yen's fall and profit taking by some investors
discounted it," the head of research at Trimegah Securities,
David Chang, said.

Stock brokers said the bullish sentiment at the opening of
trading on the local exchange, the first after the CGI pledged
$7.9 billion in loan commitments to Indonesia, did not last long
as some investors started to take profits to benefit from the
gains they made prior to the CGI meeting.

"Profit taking coupled to the weaker rupiah following the drop
of the Japanese yen ate up the gains made in the morning
session," a broker with Mashill Jaya Securities said.

Trading on the local exchange was marked by a small rally at
the JSX building yesterday by dozens of supporters of dismissed
PLN president Djiteng Marsudi, They demanded State Minister of
the Empowerment of State Enterprises Tanri Abeng review the
privatization program.

"We want Minister Tanri Abeng to review the privatization
program," one of the protesters shouted.

But dealers said investors were not really affected by the
rally.

"Demonstrations like this have become a political game rather
than a business game," a dealer with a local securities house
said.

Tin producer PT Tambang Timah fell Rp 100 to Rp 8,700 on
765,000 shares traded and cigarette maker PT Gudang Garam shed Rp
50 to Rp 8,900 on 516,500 shares traded. (aly/rid)