Rupiah to remain flat this week, analysts say
Rupiah to remain flat this week, analysts say
A'an Suryana, The Jakarta Post, Jakarta
The rupiah and local stocks are expected to remain flat this week
amid the absence of fresh leads and a relatively stable political
condition, according to analysts.
Currency Management Group analyst Farial Anwar, however, said
that if Wall Street plunged again, it could create pressure on
the local currency.
Farial predicted the rupiah would be stable this week,
hovering around at Rp 8,800 to Rp 9,000 per U.S. dollar.
"The rupiah is entering a consolidation period," said Farial.
The Rupiah closed at Rp 8,830 on Friday.
The market didn't react to the announcement of the 2003 state
budget draft and the narrower fiscal deficit of 1.3 percent of
gross domestic product from 2.5 of GDP this year.
The IMF praised the budget draft as "a sound budget which
should help reinforce macroeconomic stability."
Farial said that the government's 2003 state budget draft,
unveiled by President Megawati Soekarnoputri on Friday, did not
lift sentiment in the rupiah because market players doubted
whether the government could meet the 5 percent economic growth
target as stated in the budget proposal.
"There will be no more big events this week and sometimes to
come, therefore the rupiah would likely be more stable," said an
analyst at a foreign currency firm.
Farial, however, warned that the rupiah could be under
pressure if stocks on Wall Street plunged again, which would
cause stock investors here to also unload some of their stocks
and exchange their rupiah funds with dollars.
Stock analysts said that the local equity market would likely
remain flat this week unless the U.S. markets plunged further.
"The selling of shares in PT Telkom on Friday had managed to
temporarily pull up the stock index. But, market players are
still cautious over what will happen on Wall Street," said stock
analyst Edi S. Widjojo.
Indonesian shares ended higher on Friday, led by buying in the
Telkom shares. The good performance of Telkom shares was mainly
due to latest financial report by the company, which reported
strong first half-earnings.
The Jakarta Stock Exchange composite index closed at 450.98
Friday.
Edi predicted that the share index would hover around 445 to
455 this week.
Separately, Hengky Sumarli from Kim Eng Securities, said that
market players should turn their eyes to consumer product
companies, as the country's economic growth would still be mainly
driven by consumer spending.
Shares at cigarette giants PT HM Sampoerna and PT Gudang
Garam, should up this week, Hengky said.