Share prices up, rupiah muted over new cabinet line-up
Share prices up, rupiah muted over new cabinet line-up
JAKARTA (JP): Local stock prices rebounded yesterday while the
rupiah remained weak in response to Soeharto's resignation and
the announcement of a new cabinet line-up by President B.J.
Habibie, stockbrokers and currency dealers said.
They said the increase in stock prices was largely supported
by speculative trading by local brokerage houses for second- and
third-line stocks in the absence of foreign investors.
"Trading activities remained quiet for the whole trading day
because investors are still cautious over the country's political
situation," a broker with Trimegah Securindo Lestari said.
"There was no significant trading at all by foreign
institutional fund managers," the dealer said, adding that most
foreign brokerage houses were closed following the turbulent
riots which left more than 500 people dead last week.
The JSX Composite Index rose 4.9 percent or 21.13 points to
445.14 points yesterday with a total of 199.68 million shares
changing hands in the regular market valued at Rp 207.59 billion
(US$18.87 million).
Pentasena Securities research head Mohammad Syahrial said the
increase in stock prices was just a euphoric market reaction to
the resignation of Soeharto rather than a recovery of investor
confidence in the country's economy.
Mashill Jaya Securities research head Tjandra Kartika said the
country's political situation posed the biggest obstacle for
foreign investors wishing to place their funds in the local
market for the medium and long term.
"The market is relatively stable for now, but it will remain
turbulent in the medium and long term," he said.
A Trimegah's broker said that some local investors continued
to dump stocks linked to former president Soeharto's family, like
conglomerate Bimantara Citra and toll-road operator PT Citra
Marga Nusaphala Persada (CMNP).
The two stocks have been under severe selling pressure over
the past few months due to speculation that Soeharto was losing
his grip on power.
Bimantara Citra, controlled by Soeharto's second son Bambang
Trihatmodjo, fell Rp 25 to Rp 375 on a total volume of 15.84
million shares, while CMNP, controlled by Soeharto's daughter
Siti Hardijanti Rukmana, slid Rp 25 to Rp 400 on a total turnover
of 8.19 million shares.
In the currency market, the rupiah remained weak in very quite
trading, dealers said.
The rupiah closed at 10,600/11,200 against the U.S. dollar in
the Jakarta spot market after weakening to as low as 11,500
yesterday.
The dealers said rupiah trading remained thin for the whole
day because most operators were still waiting for concrete steps
from President B.J. Habibie's new economic team.
"The market is still cautious to make any moves on the rupiah
since the country's political atmosphere remains uncertain," a
dealer with a local bank said.
Dealers said the currency market had welcomed the new economic
team but the uncertainties over the political situation would
pose another barrier for investors.
"The market has not seen any clear-cut measures on the
political agenda," the dealer said. (aly)