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)