Rupiah strengthens, share prices up after 10-day drop
Rupiah strengthens, share prices up after 10-day drop
JAKARTA (JP): The rupiah strengthened yesterday to pass the
13,000 level against the U.S. dollar and stock prices perked up
to register gains after 10 consecutive days of losses.
Currency dealers said the rupiah was boosted by news of
rescheduling of Indonesia's sovereign debts and a rebounding yen.
They said several state banks sold dollars in a limited amount
in an effort to shore up the rupiah, which has lost about 80
percent of its value against the dollar in the past year.
"Some state banks continue to step into the market in recent
days to prop up the rupiah," the chief dealer with a local
private bank said.
The rupiah hovered above the 13,000 level in thin dealing. The
currency closed 3 percent higher at 12,950 on the Jakarta spot
market, compared to its Tuesday close of 13,100.
"The rupiah gained also because of the strong yen," the chief
dealer said.
Dealers said the yen strengthened to pass 145 against the
dollar from the 147 level Tuesday.
Bank Indonesia's weekly auction of SBI promissory notes at a
weighted average interest rate of 69.39 percent resulted in an
absorption of Rp 15.14 trillion from the market, allowing no room
for players to buy dollars.
Despite this development, some market participants said that
continuing groundless rumors of a massive social outbreak in the
run-up to the country's Independence Day next week would still
cast a shadow over rupiah trading in coming days.
"Though these are just groundless rumors, some investors were
greatly concerned over the issue," the chief dealer said.
Jakarta and other cities were rocked by rioting in May which
contributed to the resignation of then president Soeharto.
The government and the military have repeatedly assured the
public there would be no recurrence of the rioting.
The stable rupiah and regional strength boosted sentiment on
the Jakarta Stock Exchange (JSX).
The JSX Composite Index closed 1.57 points higher to 408.63,
after nearing the key 400-point level in early trade, on a total
trading turnover of 246.99 million shares changing hands valued
at Rp 391.36 billion (US$30.22 million).
Gainers outpaced losers by 55 to 40 with 84 shares unchanged.
"The slight increase is purely on a technical rebound as some
stocks have been oversold," said head of research of Sigma Batara
Fadjar Limin Sutandi.
He added that the rise of other markets in the region on the
impact of a strong yen had helped stock prices in the local
market to increase slightly.
Most brokers said that despite a slight rise in stock prices
yesterday, worries over possible rioting would force most foreign
institutional investors to take a wait-and-see attitude or even
make sell-offs on blue-chip stocks.
"Uncertainty on the country's economic and social fronts
remains a big problem for investors," Sigma Batara's Fadjar said.
Instant noodle-maker Indofood Sukses Makmur rose sharply by Rp
225 to Rp 2,100 on 26.61 million shares on market talk that a
foreign company would likely acquire a significant stake of the
cash-strapped firm.
International telecommunications operator Indosat rose Rp 200
to Rp 19,175 on 1.13 million shares because the company's stock
price was considered cheap by investors. Pulp and paper producer
Tjiwi Kimia rose by Rp 50 to Rp 2,125 on 7.18 million shares.
(aly)