Steady rupiah to prop up stock market: Analysts
Steady rupiah to prop up stock market: Analysts
The Jakarta Post, Jakarta
Analysts expect the rupiah to remain flat against the U.S. dollar
in the coming week due to a lack of sentiment.
This steady outlook for the rupiah should help the local stock
market remain in positive territory as undervalued
telecommunications and banking shares rebound, according to the
analysts.
"I'm seeing the rupiah continue unchanged from last week,
staying somewhere between Rp 9,400 and Rp 9,500 to the dollar,"
currency analyst Farial Anwar told The Jakarta Post on Sunday.
He said the local currency was unlikely to get any stronger
than Rp 9,400 because there were no imminent leads for the
rupiah.
On the other hand, despite a recent strengthening of the U.S.
greenback against other major currencies, Farial believes the
rupiah can withstand the pressure, particularly with the support
of the central bank.
"Bank Indonesia will do everything it can to keep the rupiah
above the Rp 9,500 level," he said.
The rupiah closed trading at Rp 9,448 to the dollar last
Friday, down slightly from Thursday's close of Rp 9,445 as the
dollar gained against the Japanese yen.
The local currency gained slightly from its Rp 9,486 closing
the previous week, on suspected dollar-selling by U.S. cigarette
giant Philip Morris to finance its acquisition of local cigarette
producer HM Sampoerna.
The central bank said it would continue to raise its benchmark
interest rate for the remainder of the year to stem inflation,
after increasing its one-month SBI rate to 7.91 percent last
week.
On the stock market, analyst David Ferdinandus of Anugerah
Indah Securities was quoted by Bloomberg as saying that investors
would likely begin buying shares of state-controlled
telecommunications firm PT Telkom ahead of the publicly listed
firm's annual shareholders meeting next month.
"Investors may be keen to accumulate Telkom ahead of its
dividend announcement," he said.
Other analysts expect the market to trade higher on follow-
through buying of Telkom shares.
Investors will also continue buying back shares in banks that
will pay attractive dividends, they said, particularly Bank
Mandiri and Bank Rakyat Indonesia.
Trading some 1.21 billion shares worth Rp 863 billion (US$90.8
million), the Jakarta Stock Exchange Composite Index closed at
1,048.11 points last Friday, up 2.65 points from the previous
trading day.
Over the week, however, the index shed 11.16 points or 1.05
percent.
The market will have a brief opening on Monday, a national
holiday intermezzo on Tuesday, before reopening on Wednesday.