Rupiah, stocks suffer on political woes
Rupiah, stocks suffer on political woes
JAKARTA (JP): Indonesia's rattled financial markets shuddered
again on Thursday with the rupiah sinking below 12,000 to the
U.S. dollar on the back of escalating political tension at home,
currency dealers said.
Stock prices also suffered, although the main price index rose
slightly.
The crippled rupiah, which opened at 11,700/11,800, dipped to
an intraday low of 12,100 in the morning before recouping to
11,950/12,050 at the close of trading due to dollar-unloading by
state banks.
Thursday's close was 1.6 percent lower than the Wednesday
close of 11,800.
"Since political stability has not been restored yet, a small
student rally will certainly kill the financial market," a chief
dealer with a local private bank said.
News reports said that hundreds of students staged a noisy
demonstration next to Merdeka Palace on Thursday demanding
President B.J. Habibie step down and lower prices of basic
commodities.
Thursday's peaceful rally was the latest by students over
escalating prices and Habibie's failure to arrest the country's
deteriorating economic crisis.
Dealers said that even though the state-banks continued to
unload dollars for rupiah on the foreign exchange market, they
failed to prevent the rupiah from falling against the American
dollar.
"The amount of market intervention is small compared to dollar
demand by offshore operators," the dealer said pointing out that
overseas operators, especially Singaporeans, put in bulk dollar
buying orders to take the advantage of political instability at
home.
Stock prices on the Jakarta Stock Exchange (JSX) also fell on
escalating worries over the domestic political situation although
the main price index rose firmed slightly on the back of massive
buying of cementmaker PT Semen Gresik.
The JSX Composite Index rose 1.50 points to 327.27 on a total
turnover of 215.72 million shares changing hands valued at Rp
241.36 billion (US$20.11 million).
Dealers said investors speculatively bought shares in state-
owned Semen Gresik following a statement from the government that
it would like to raise its share price by 200 percent.
"Positive news on Semen Gresik helped revive the sentiment in
the local market," Andre Cita, associate director of Bahana
Securities, said.
He said renewed positive sentiment like this, despite several
reports of student demonstrations, prevented stock prices from
slumping further.
"If students stage a peaceful rally like this, foreign
investors will not be so scared," he said pointing out that the
violent rally on Monday prompted foreign investors to shun the
bruised local market.
Other stockbrokers said the market, however, remained cautious
as fears of more antigovernment protests hadn't faded while
reports of rioting had rocked several major cities in the
country.
"Foreign investors who had long left our market do not have
any plans in the short term to come back," another broker with
Mashill Jaya Securities said.
Semen Gresik rose Rp 1,200 to Rp 8,075 on 3.43 million shares
changing hands while PT Telekomunikasi Indonesia, which accounts
for 17 percent of the total market capitalization, rose Rp 75 to
Rp 2,150 on 2.75 million shares traded. (aly)
JAKARTA (JP): Indonesia's rattled financial markets shuddered
again on Thursday with the rupiah sinking below 12,000 to the
U.S. dollar on the back of escalating political tension at home,
currency dealers said.
Stock prices also suffered, although the main price index rose
slightly.
The crippled rupiah, which opened at 11,700/11,800, dipped to
an intraday low of 12,100 in the morning before recouping to
11,950/12,050 at the close of trading due to dollar-unloading by
state banks.
Thursday's close was 1.6 percent lower than the Wednesday
close of 11,800.
"Since political stability has not been restored yet, a small
student rally will certainly kill the financial market," a chief
dealer with a local private bank said.
News reports said that hundreds of students staged a noisy
demonstration next to Merdeka Palace on Thursday demanding
President B.J. Habibie step down and lower prices of basic
commodities.
Thursday's peaceful rally was the latest by students over
escalating prices and Habibie's failure to arrest the country's
deteriorating economic crisis.
Dealers said that even though the state-banks continued to
unload dollars for rupiah on the foreign exchange market, they
failed to prevent the rupiah from falling against the American
dollar.
"The amount of market intervention is small compared to dollar
demand by offshore operators," the dealer said pointing out that
overseas operators, especially Singaporeans, put in bulk dollar
buying orders to take the advantage of political instability at
home.
Stock prices on the Jakarta Stock Exchange (JSX) also fell on
escalating worries over the domestic political situation although
the main price index rose firmed slightly on the back of massive
buying of cementmaker PT Semen Gresik.
The JSX Composite Index rose 1.50 points to 327.27 on a total
turnover of 215.72 million shares changing hands valued at Rp
241.36 billion (US$20.11 million).
Dealers said investors speculatively bought shares in state-
owned Semen Gresik following a statement from the government that
it would like to raise its share price by 200 percent.
"Positive news on Semen Gresik helped revive the sentiment in
the local market," Andre Cita, associate director of Bahana
Securities, said.
He said renewed positive sentiment like this, despite several
reports of student demonstrations, prevented stock prices from
slumping further.
"If students stage a peaceful rally like this, foreign
investors will not be so scared," he said pointing out that the
violent rally on Monday prompted foreign investors to shun the
bruised local market.
Other stockbrokers said the market, however, remained cautious
as fears of more antigovernment protests hadn't faded while
reports of rioting had rocked several major cities in the
country.
"Foreign investors who had long left our market do not have
any plans in the short term to come back," another broker with
Mashill Jaya Securities said.
Semen Gresik rose Rp 1,200 to Rp 8,075 on 3.43 million shares
changing hands while PT Telekomunikasi Indonesia, which accounts
for 17 percent of the total market capitalization, rose Rp 75 to
Rp 2,150 on 2.75 million shares traded. (aly)