Share prices and rupiah fall again
Share prices and rupiah fall again
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
fell again yesterday as local investors awaited the return of
foreign buyers.
Securities analysts said the absence of foreign investors,
which previously controlled over 70 percent of trading
activities, remained the main factor for the sluggish market.
"How can we expect foreign investors to enter the Jakarta
stock market while regional markets weaken," Fadjar Limin Sutandi
of Sigma Batara asked.
He said American and European investors perceived that the
regional markets were still jittery in the face of the currency
crisis.
Most local investors still found that depositing rupiah in
banks was still more attractive than portfolio investments.
"The weakening rupiah is also to blame for the fall of stock
prices in the Jakarta stock market," a stock broker with a joint
venture securities firm said.
The JSX composite index lost 0.8 percent or 3.09 points to
close at 398.61 yesterday with a total turnover of 264.80 million
shares valued at Rp 264.87 billion (US$72.56 million).
As stock prices lost ground, the rupiah followed suit, sliding
below the 3,700 level against American greenback yesterday,
triggered by the sharp fall in the Thai baht and the persistent
weakness in regional currency markets, foreign currency dealers
said.
A chief dealer from a local private bank said that the central
bank's intervention to support the rupiah at the 3,710 level
during the midday trading session failed to bring the currency to
recoup against the U.S. dollar.
"Bank Indonesia's intervention has not been effective as it
cannot keep the rupiah propped up against the dollar," he said.
The dealer said that the amount of dollars selling was not
much, hovering between $75 million and $100 million.
"Given such limited dollar selling, it cannot lift up the
rupiah against the U.S. dollar," he said.
He said a joint intervention by Bank Indonesia, along with the
Bank of Singapore and the Bank of Japan would be effective to
shore up the rupiah.
"When three banks intervened in the foreign exchange market
some time ago, the rupiah strengthened 300 points. The joint
intervention would psychologically affect the market," he said.
Spot rupiah ended lower and closed at 3,715/25 in late trading
yesterday compared with the opening of 3,665/75 in the morning
session.
Foreign currency dealers also attributed the weakening of the
rupiah yesterday to the high demand by local companies to cover
their dollar debts. (aly)