Rupiah up as House session ends peacefully

Rupiah up as House session ends peacefully

JAKARTA (JP): The battered rupiah gained ground on Monday
after rallies by President Abdurrahman Wahid's supporters went
off peacefully.

Forex dealers said the bullish dollar dipped as profit-taking
set in, after weeks of panic-selling had destabilized the local
unit, dealers said.

Monday trading took the rupiah to 11,600 against the U.S
dollar, compared to 11,800 at market close last Friday.

They said that small amounts of dollar-selling had been enough
to prop up the rupiah which was trading in a thin market.

Sunday's peaceful mass prayer of President Abdurrahman
supporters helped open trading with a positive market sentiment.

Analysts said that tight security measures by police further
calmed market fears of street violence.

Nonetheless, these worries had many participants avoid
trading, Bank Mandiri currency analyst Martin Pangabean said.

"The market was thin because many people dared not to
trade ... and corporate demand (for dollars) was as good as
none," Martin said.

He suspected that banks did most of the trading, wanting to
circulate their dollars to gain on the trading spread.

"Individual players were negligible," he added.

Worries of an outbreak of violence have run high over recent
weeks, with thousands of President Abdurrahman's supporters
feared of causing violent riots in Jakarta.

Fearing clashes between Abdurrahman's supporters and
opposition, the market piled the dollar causing the greenback to
break the 12,000 level during Thursday's trading.

Most of the President's supporters belong to the Nahdlatul
Ulama (NU), an organization Abdurrahman led for more than 15
years, and which organized the mass prayer on Sunday.

Apparently meant as a show of force ahead of the House's
plenary session on Monday, the event failed to attract the
400,000 supporters President Abdurrahman had claimed would flood
Jakarta.

On Monday, the supporters also decided to cancel a rally in
front of the House compound, further easing worries of clashes
with security personnel.

Late on Monday night, the House finally issued the second
memorandum against the President for his alleged involvement in
two financial scandals, a move that brings him closer to
impeachment.

Martin said the market was not entirely safe yet, with big
street rallies expected for Tuesday's May 1 World Labor Day.

But with many of the President's supporters from Central and
East Java remaining in the capital, the rallies could prove to be
dangerous, he said.

"The market is shifting its attention to these events. It's
doubtful the police could control such large masses of people if
they confronted one another," he added.

Martin said that the rupiah would remain in a thin market on
Tuesday, making it prone to volatile trading.

"In a thin market the rupiah can go either way: add small
amounts of dollars and it will shoot up," he said, adding: "it's
going to be volatile."

Meanwhile, PT Bhakti Investama stock analyst Budy Ruseno said
the peaceful rally of President Abdurrahman's masses encouraged
investors to go bargain hunting.

The Jakarta Stock Exchange Composite Index rose slightly to
358.23 from last week's closing of 347.68.

According to him, the index's gain could, however, prove
temporary since most local players tended to buy on speculation.

"I don't think the index can sustain this upward trend for
very long," he said. (bkm)