Stock prices increase by 2.3 percent

JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX) surged 2.3 percent yesterday on the back of positive news about the possible outcome of the negotiations between the International Monetary Fund (IMF) and the government.

Brokers said that most investors were encouraged by IMF First Deputy Managing Director Stanley Fischer's statement that the talks were close to agreement.

Fischer said after a meeting with President Soeharto yesterday that a new letter of intent between Indonesia and the IMF was likely to be signed next week allowing for the release of funding assistance to Indonesia.

"The investors are anxiously waiting for the announcement of the new agreement and the release of the new funds from the IMF," a broker with BZW Niaga Securities said.

The JSX Composite Index rose 3.2 percent or 16.87 points to to 533.30 points, with 665.46 million shares worth Rp 723.34 billion (US$84.60 million) changing hands.

The brokers said that most bank stocks were, however, under heavy selling pressure on rumors that the government would close down a number of troubled banks. The rumor was later denied by Bank Indonesia.

Trading of Bank Danamon and Bank Modern stocks was temporarily suspended after both dived more than 40 percent.

The trading of these two stocks would be resumed after the banks' management explained if they had any programs which could cause a loss to investors, the statement said.

As most stock prices remained bullish, the rupiah closed at 8,500 against the U.S. dollar in Jakarta spot market yesterday, practically unchanged from its close at 8,550 the previous day.

In Tokyo, the benchmark Nikkei 225 Stock Average dropped 185.12 points, or 1.18 percent, to close at 15,517.78 - a four- month low.

In Seoul the Korea Composite Stock Price Index fell 19.21 points, or 4.2 percent, to 434.45.

In Kuala Lumpur, the key Composite Index fell 17.79 points to 666.48.

In Bangkok, the Stock Exchange of Thailand (SET) index fell 10.92 points to 442.96.

In Hong Kong, the Hang Seng Index fell 137.03 points, or 1.2 percent, closing at 11,052.68.

In Taipei, the market's key Weighted Stock Price Index rose 120.96 points, or 1.34 percent, to 9,134.06.

In New Zealand, the NZSE-40 Capital Index fell 2.7 points, or 0.1 percent, to 2,312.43.

In Manila, the Philippine Stock Exchange index of 30 selected stocks slipped 0.45 of a point to 2,173.55.

In Australia, the All Ordinaries Index rose 13.8 points, or 0.5 percent, to 2,770.8.

In Singapore, the key Straits Times Industrials Index fell 17.09 points, or 1.1 percent, to 1,551.51.