Rupiah, stocks rise on regional boost
JAKARTA (JP): Indonesia's rattled financial market showed uncharacteristic stability on Monday despite reports of a large student rally at the House of Representatives (DPR).
The rupiah, which opened at 10,900 against the dollar, held firm all day due to an improvement in the region's financial markets before closing at 10,850/10,875.
A student rally outside the DPR on Monday did not draw significant market attention away from Malaysia's foreign exchange capital control introduced last week.
"The student demonstration didn't really pressure the rupiah," one currency dealer said.
Hundreds of student protesters tore down the gates in front of the DPR complex during their demonstration, in which they demanded President B.J. Habibie step down because he had mishandled the country's economic crisis.
As the students advanced from the gates into the compound, hundreds of riot police blocked their way, forcing a standoff.
Currency dealers, however, warned that if similar demonstrations continued to occur, the rupiah would fall against the American dollar.
Stock prices on the Jakarta Stock Exchange (JSX) closed the day 3.1 percent higher in moderate trading on the back of improved sentiment in other regional major equities markets.
Stockbrokers said a strengthening yen and a bounce in equity markets throughout Asia contributed to the local bourse's surge.
"Monday's rise in stock prices was just a spillover from other regional markets because confidence in the country's market has yet to improve," said the associate director of Bahana Securities, Andre Cita.
The JSX Composite Index closed 10.25 points firmer at 335.81 on a total volume of 184.93 million shares valued at Rp 261.18 billion (US$24.18 million).
Gainers outpaced losers 61 to 22 with 78 shares remaining unchanged.
Andre said short-term oriented traders took the advantage of the regional uplift to buy cheap stocks with strong fundamentals in the local bourse.
"This helped the market rise slightly," he said.
Stockbrokers said that foreign fund managers, who had long stayed away from the local bourse, were not overly anxious about the student rally and recent labor protests demanding the government lower prices of basic commodities.
Stockbrokers said, however, that although stock prices rose, trading activities in the local exchange remained thin as most foreign investors remained absent from the local market.
Most large capitalized stocks ended higher on Monday with Telekom rising Rp 175 to Rp 2,275 on 6.04 million shares, Tambang Timah by Rp 200 to Rp 4,600 on 442,000 shares and international satellite operator Indosat by Rp 600 to Rp 7,525 on 1.08 million shares.
Cigarettemaker HM Sampoerna also enjoyed an increase of Rp 175 to Rp 2,350 on 10.78 million shares, while rival Gudang Garam rose Rp 200 to Rp 8,000 on 415,000 shares. (aly)