Stock prices, rupiah fall on political concern

Stock prices, rupiah fall on political concern

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
lost nearly one percent and the rupiah fell further, closing at
Rp 9,300 to the U.S. dollar, as anti-government protests
continued yesterday.

Stockbrokers said that activity on the JSX remained lethargic
for the whole trading day, with most investors sidelining the
market.

"The country's worsening political situation is prompting most
foreign investors to stay out of the market," a broker with BZW
Niaga Securities said.

Brokers said that students demonstrations, which in recent
days have resulted in violent clashes between protesters and
security officers, had scared away investors.

University students have staged concerted demonstrations over
the past few weeks demanding President Soeharto's resignation and
concerted efforts to lift the country out of crisis.

Head of sales at Usaha Bersama Sekuritas, Surya Martara, said
the failure of talks held in Tokyo over the weekend to resolve
problems surrounding the country's US$68 billion private sector
overseas debt was also to blame for the sluggish market.

The JSX Composite index closed at 430.53 yesterday, 0.9
percent (4.12 points) down on Friday, with a total turnover of
257.85 million shares valued at Rp 275.75 billion (US$30.63
million).

Most brokers said stock prices of certain blue chip stocks
and politically-well connected stocks like Bimantara Citra, owned
by President Soeharto's second son Bambang Trihatmojo, and Citra
Marga Nusaphala Persada (CMNP), controlled by President
Soeharto's eldest daughter Siti Hardijanti Rukmana, fell on fears
that the country's political situation could worsen.

Adding to the country's political woes, higher interest rates
in the banking system had caused most investors to place funds in
time deposits, which currently offered higher yields, brokers
said.

"The local bourse is facing trouble on two fronts -- the
political woes and high interest rates," the broker from BZW
Niaga Securities said.

The rupiah followed the stock market's downward trajectory in
response to the worsening political atmosphere in the country,
currency dealers said.

They said the rupiah, which opened trading at around Rp 9,250
against the U.S. dollar, closed the day on Rp 9,300 after
moderate dealing. Most investors were wary of entering the fray.
(aly)