Rupiah unchanged, share prices lose ground
JAKARTA (JP): The rupiah remained bearish on Friday to end the week almost unchanged at 8,700 against the U.S. dollar as stock prices fell 0.5 percent.
Currency dealers said that the rupiah, which opened at 8,700, was barely moved as most offshore participants, especially from Singapore and Hong Kong, had reduced their activities ahead of Lunar New Year next week.
"The market was merely moved by position-squaring as offshore operators will be away for the Lunar New Year holiday next week," a chief dealer with a joint venture bank in Jakarta said.
Currency dealers said that Bank Indonesia was not seen in the market, like it was on the previous days, unloading dollars to defend the rupiah from falling against the American greenback.
"I think it would be dangerous for Bank Indonesia to step into the market now as such efforts might be harmful for the rupiah,' another dealer said.
The rupiah was unaffected by the yen's slide against the dollar following the Bank of Japan's reduction in its overnight call money rate target to 0.15 percent from 0.25 percent, dealers said.
"The Japanese yen fall did not have that big an impact on the rupiah," the dealer said, pointing out that the bearish yen could pose a big threat to the rupiah's stance in the coming week.
"Things have not changed much, as the rupiah will remain bearish against the dollar," another dealer said while adding that the rupiah was expected to be traded in the range of between 8,500 and 9,000 next week.
Unlike the rupiah, share prices in the local market declined on Friday with the Jakarta Stock Exchange (JSX) main composite index falling 2.09 points to 400.55 on a total turnover of 298.91 million shares worth Rp 189.47 billion changing hands.
Losers outdistanced gainers 53 to 25 with 87 stocks remaining unchanged.
Stockbrokers said that trading volume had dwindled as investors had not found any fresh leads luring them into the battered local market.
"Though there was some buying in the morning, it was capped by a massive selloff in late trading," Vonny Juwono, an institutional sales dealer with Trimegah Securindolestari said.
She said that most foreign brokerage firms like ING Barings, GK Goh Ometraco and Credit Lyonnais Securities placed more sales orders than purchases on Friday because they were not tempted to hold their portfolios for long periods.
"Investors are basically making short-term speculative trading now as they do not find any meaningful reason to stay here long," said Edhi S Widjojo, head of research of Mashill Jaya Securities.
Edhi said that lingering worries over the possible social unrest ahead of the general election on June 7 and presidential and vice presidential elections later this year have become a time bomb for the local market.
Stockbrokers said most well-capitalized stocks, which rallied early this week, slipped on Friday on massive profit-taking. They were speedily realizing gains made earlier and provided no room for the local share prices to gain ground.
Share price of state telecommunications firm PT Telkom slid Rp 25 to Rp 2,925 on 14.17 million shares changing hands, mining firm PT Aneka Tambang fell by Rp 25 to Rp 1,475 on a total turnover of 1.78 million shares and cigarette maker PT HM Sampoerna slid Rp 150 to Rp 5,925 on 1.49 million shares. (aly)