Stocks and rupiah drop in quite trading
Stocks and rupiah drop in quite trading
JAKARTA (JP): Stocks prices on the Jakarta Stock Exchange
(JSX) continued to fall yesterday on lack of fresh incentives in
quiet trading.
Securities analysts attributed the fall to the weakening
regional market and the persistent fall of the rupiah against the
American dollar.
"To tell you frankly, it's a hopeless market for the whole
region. People are doing nothing today," a broker said.
The JSX composite index fell 1.23 percent, or 4.87 points to
391.26 points, with 359.28 million shares changing hands in the
regular market at a total transaction value of Rp 326.23 billion.
Decliners led gainers by 69 to 48 with 59 stocks remaining
unchanged.
Stockbrokers also attributed yesterday's fall in stock prices
to investors' increasing worries about the ability of local
private companies to pay their mounting foreign debts.
The government announced recently that the country's total
foreign debt was US$117.3 billion, with private companies' debts
accounting for US$65 billion and the government's for $52.3
billion.
Stockbrokers said the market had reacted negatively to the
government's announcement that it would not bail out private
debts.
"Investors' interest continued to decline to hear that
announcement," an analyst from a joint venture securities firm
said.
"I think most investors have held back their portfolio
investments from the stock market," Edi Widjojo, an analyst with
Mashill Jaya Securities said.
Previously foreign investors accounted for most transactions
in the Jakarta stock market.
As stocks fell, the rupiah followed suit despite a
a limited intervention by the central bank, Bank Indonesia.
Bank Indonesia intervened in the market several times in the
morning and afternoon with a limited amount of dollar selling.
"The central bank was seen several times in the market but no
confirmed amount of dollars was sold," a currency dealer said.
Foreign exchange dealers said the central bank stepped in at
mid-afternoon trading when the rupiah was at 3,610 and 3,615
levels after it had weakened to a low of 3,635.
Spot rupiah closed at 3,610/20 against an opening 3,545/55 in
the morning trading session.
A currency dealer said that the central bank intervened in the
market twice in the morning to prevent the rupiah from falling
below the 3,600 level, though it was not fruitful.
Dealers said the rupiah was likely to trade at between 3,600
and 3,700 next week on prolonged weakness in the regional market.
"It's difficult to fight against the market nowadays. It is no
use the central bank intervening in the market because it goes
against the market trend," one chief dealer from a local private
bank said. (aly)