Rupiah, stocks recover from bomb incident
Dadan Wijaksana, The Jakarta Post/Jakarta
The Indonesian currency and stock markets staged a quick recovery on Friday, as hopes are high that the deadly bombing a day earlier will not undermine the economy or sabotage the presidential election.
The rupiah closed higher at Rp 9,280 per dollar, up from 9,330 the previous day. The local unit breached the 9,400 level just after a high-powered bomb went off near the Australian Embassy.
"But even yesterday (Thursday), panic selling after the blast did not last long, the market sentiment slowly improved afterward," said one currency dealer.
"The rupiah's performance today only confirmed that, supported also by expectations that the presidential runoff will be peaceful," he added, referring to Sept. 20 voting day when President Megawati Soekarnoputri will compete head-on with the only other candidate, Susilo Bambang Yudhoyono, for the 2004-2009 presidential term.
Aslim Tadjuddin, Bank Indonesia deputy governor, was also upbeat about the post-bombing outlook, saying the rupiah had stabilized.
The rupiah may face an even brighter outlook if the election proceeds smoothly, he added. "The rupiah is expected to stabilize further as the economic fundamentals remain good. The market can now differentiate which disturbances are caused by fundamental factors and which aren't."
The remarks echoed earlier optimistic statements by other top economic officials.
Coordinating Minister for the Economy Dorodjatun Kuntjoro- Jakti said that the terror attack would have only a small impact on the economy, which is projected to grow by 4.8 percent this year, as evident in previous bombings -- including the bombing of two nightclubs on Bali, which killed 202 people in 2002.
On the stock market, the sentiment was good enough to drive the Jakarta Stock Composite Index to a four-month high, led by some blue chip shares hurt by the drop the day before.
The index closed 1.9 percent up at 797.78 points from the previous closing, the highest level in four months. It dropped 4 percent after Thursday's blast, but regained ground to close 0.8 percent lower.
"Sentiment was virtually back to normal today. What's important for the government is to maintain the momentum and keep feeding the market with good signs, such as providing detailed updates on the investigation, introducing measures to avoid similar occurrences," said one stock dealer.
The nation's largest telecommunications firm Telkom, cigarette maker giants Gudang Garam and HM Sampoerna all rose on a rebound after falling the day earlier.
Telkom rose by 1.3 percent to Rp 8,050 after falling 2.5 percent the previous day, as Gudang Garam and Sampoerna gained 2.3 percent and 4.7 percent, respectively.
Gudang Garam closed at Rp 13,250, while Sampoerna at Rp 5,600.
Overall, 116 gainers outran 24 decliners with 54 shares unchanged.
Indonesian markets will be closed for Monday's public holiday.