Share prices, rupiah gain ground in active trading

JAKARTA (JP): After weeks of decreases, share prices surged in active trading yesterday in line with the bullish sentiment in regional markers.

Securities and foreign exchange dealers said that the bullish regional market and no news of riots in the country also brought the rupiah to an intraday high of 12,600 against the U.S. dollar.

"It is really a good day. The bullish sentiment overseas, combined with no reports of fresh unrest at home are really encouraging," a dealer said, describing the trading sentiment during the day.

Widespread rumors that there will be massive rioting ahead of the Aug. 17 Independence Day celebrations have negatively affected local financial markets in the past several days.

Troops were seen closely guarding business centers and other public places yesterday and no incidents were reported.

"The ups and downs of the rupiah over the past few weeks has been determined by the social and political climate ... and the absence of news on riots really boosted the currency," the dealer said, adding that some Singaporean operators, who have been active in deflating the rupiah, were not active yesterday.

The rupiah closed firmer at 12,600/12,800 to the American dollar yesterday, higher than Thursday's close of 12,950 to the dollar.

Some state banks were seen selling dollars for rupiah to improve the rupiah's stand against the dollar, dealers said.

"If the state banks sold a substantial amount of U.S. dollars, the rupiah might have broken the 12,500 level," the dealer said, pointing out that state banks sold a meager US$10 million yesterday.

Dealers said the rupiah might continue to rally against the U.S. dollar in coming days provided that no fresh riots take place in Jakarta or other major cities.

"If the rupiah has broken the 12,500 level, it might test 12,000 afterward," another dealer with a private bank said.

Taking the rupiah's lead, stock prices on the Jakarta Stock Exchange (JSX) ended 2.8 percent higher yesterday as most investors, taking advantage of the calm, bought certain selected blue-chip stocks.

The JSX Composite Index rose 11.68 points to 414.63 yesterday on a total trading turnover of 493.42 million shares valued at Rp 1.13 trillion changing hands on the regular market.

Gainers outpaced losers by 70 to 28 with 69 stocks remaining unchanged and 121 untraded.

Stocks brokers said investors in the local market ignored the rumors of vast unrest which had made most of them nervous over the past few weeks.

"I think people feel comfortable enough as there has been no news of riots. As a result, investors are putting in large buying orders on certain stocks," the head of research of Trimegah Securindo Lestari, David Chang, said.

Stock brokers said trading activities on the local market were active because the country had remained relatively calm.

"This is good news for some investors, besides some stocks have been oversold," a broker with Mashill Jaya Securities said.

Some blue-chip stocks ended higher yesterday with instant noodle Indofood Sukses Makmur rising Rp 125 to Rp 2,150 on 29.59 million shares, cigarette maker HM Sampoerna rose Rp 300 to Rp 2,825 on 18.40 million shares while its competitor Gudang Garam rose Rp 350 to Rp 8,150 on 237,500 shares. Gold and nickel producer Aneka Tambang rose Rp 175 to Rp 2,275 on 16.95 million shares. (aly)