Rupiah strengthens but stocks lose gains

Rupiah strengthens but stocks lose gains

JAKARTA (JP): The rupiah gained ground yesterday, breaking the
13,000 level against the U.S. dollar in mild dealing, but stock
prices fell almost 3 percent due to profit taking on big cap
stocks, dealers and stockbrokers said.

Currency dealers said the improvement in the Japanese yen to
144.80 against the dollar after a seven-week low Monday helped
boost other regional currencies, including the rupiah.

The rupiah, which opened at 13,050 in the early trading
session, advanced to touch a day high of 12,800 before closing at
12,900. The currency closed Monday at 13,100.

"The rupiah was good today (yesterday), thanks to a stable
yen," a chief dealer with a local private bank said.

Beside a stable yen, dealers said that intervention by the
central bank, which sold the dollar in the market through several
state-owned banks, also contributed to the strong rupiah.

"We saw some state banks sell around US$10 million in the
market," the chief dealer said.

Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita said in Paris last week the government
would use some portion of foreign loans to buy rupiah from the
market in an effort to bring the currency to the targeted level
of 10,000 to the dollar.

Dealers said the rupiah could improve against the dollar in
the coming days provided there were no major developments which
could worsen the political and security climate.

"The rupiah is expected to test the 12,000 point level," the
chief dealer said.

However, the long-term prospects of the country's financial
market remain gloomy because uncertainty over the country's
political front has not been properly addressed by the
government, a dealer said.

Despite the strengthening rupiah, stock prices on the Jakarta
Stock Exchange (JSX) ended 2.9 percent lower yesterday, spurred
by profit taking by investors on large capitalized stocks.

The JSX composite price index fell 13.9 points to 461.35 on a
total turnover of 152.51 million shares valued at Rp 211.49
billion (US$16.39 million).

Losers outnumbered gainers by 68 against 29, with 192 counters
unchanged.

Stock brokers said the decline in large-cap stocks like state-
owned domestic telecommunications firm PT Telkom, state
international call operator PT Indosat, state tin miner PT
Tambang Timah, state general mining firm PT Aneka Tambang and
pulp and paper company PT Tjiwi Kimia helped the benchmark price
index fall sharply lower yesterday.

Together, the five companies account for about 40 percent of
the market capitalization.

"Therefore, it is just understandable if their losses have
contributed largely to the fall in the main price index," head of
research of Mashill Jaya Securities Edhi S. Widjoyo said.

The stock price of Telkom fell Rp 225 to Rp 4,125 on 9.81
million shares traded, Indosat shed Rp 525 to Rp 13,825 on
221,000 shares, Tambang Timah slid Rp 200 to Rp 8,300 on 181,000
shares, Tjiwi Kimia dropped Rp 350 to Rp 2,600 on 2.57 million
shares and Aneka Tambang dropped Rp 50 to Rp 2,400 on 9.08
million shares.

Meanwhile, cigarette maker PT HM Sampoerna gained Rp 75 to Rp
3,250 on 5.29 million shares, and competitor PT Gudang Garam was
unchanged at Rp 8,800. (aly)