Stock market rises sharply in the face of weekend riots

Stock market rises sharply in the face of weekend riots

JAKARTA (JP): Share prices on the local stock market rose
sharply by 5.2 percent on Monday and the rupiah strengthened to
7,475 to the U.S. dollar, practically shrugging off weekend
rioting in the city which claimed 13 people dead.

Stockbrokers said stocks trading on the Jakarta Stock Exchange
(JSX) was buoyed by the persistent influx of foreign funds on
most blue chip stocks.

Nevertheless, some brokers said they suspected government-
supported buying on some selected stocks to deliberately drive up
the market.

An institutional sales broker at Trimegah Securindolestari,
Vonny Juwono, said bullishness in the regional equity markets had
helped boost stock prices on the local market.

"Foreign funds continue to enter the market due to the
relatively stable political situation at home," said Vonny said.

Securities analysts said that investors had shrugged off the
impact of the occurrence of ethnic and religious clashes that
erupted in the capital city of Jakarta on Sunday.

The bloody riot on Sunday which killed 13 people was the
second of its kind this month after 'Black Friday' which claimed
the lives of several students on Friday Nov. 13, the previous
week.

Trimegah's Vonny said that several foreign brokerage firms
that had placed massive buying orders last week continued to put
in more funds to benefit from the calm situation on the political
fronts at home.

Foreign brokerage firms like ING Barings, Merryl Lynch
Indonesia, ABN Amro Securities placed more buying orders than
selling orders on Monday.

"This shows that foreign investor confidence in the country
has improved," Vonny said pointing out that some foreign fund
managers had seen signs of recovery in macro-economic indicators
of crisis-hit Indonesia.

But former JSX president Hasan Zein Mahmud said in Semarang,
Central Java, on Monday that lack of transparency and the ability
on the part of the Capital Market Supervisory Agency (Bapepam) to
effect legal enforcement still posed a big problem for the
recovery of the country's hammered bourse.

"There is no single factor that can improve the performance of
our stock market at this point," he said.

The JSX Composite Index, the main price gauge of the local
market, closed 21.33 points higher at 412.98 on a total turnover
of 861.81 million shares valued at Rp 551.29 billion (US$73.81
million).

Gains led losses by 149 to 12 with 45 stocks remaining
unchanged.

Most blue chip stocks surged on Monday with market leader PT
Telkom rising by Rp 325 to close at Rp 3,150 on 17.95 million
shares changing hands.

Taking its lead from the stock market, the rupiah in the
currency market continued to remain firm on Monday, closing
slightly higher at 7,475 against the U.S. dollar compared to its
close at 7,500 on Friday last week.

Currency dealers attributed the firm rupiah to intervention by
the central bank and the absence of foreign market participants
especially from Singapore in the currency market.

Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita said Monday that the political and social
instability at home did not affect the rate of the rupiah against
the American dollar.

"Thank God, the rupiah is not affected by the social riots,"
he told reporters after a seminar here on Monday.

Currency dealers said that the rupiah, having traded above the 7,000
level in the past few days, was expected to advance its leeway in
the coming days on the back of disbursement of International
Monetary Fund (IMF)-brokered loan for crisis-hit Indonesia.

The central bank, Bank Indonesia, has said that it would
convert between $5 million and $50 million of the funds received
from international donors daily into rupiah. (har/rei/aly)