Stocks lose ground but rupiah hits 8,800

Stocks lose ground but rupiah hits 8,800

JAKARTA (JP): Share prices on the local market lost their
footing on Wednesday as most investors cashed in gains they had
made in the last five days but the rupiah continued to gather
steam, hitting an intraday high of 8,725 against the U.S. dollar.

Stockbrokers said that bearish sentiment in regional markets
coupled with investors' persistent worries over the country's
bleak economic outlook and political uncertainty curbed
investors' buying sentiments on Wednesday.

"But on top of that, profit-taking is the dominant factor
behind the decline of the stock market," institutional sales
manager of Mashill Jaya Securities Antonio Yongnata said.

Stockbrokers said that foreign and domestic investors placed
large selling orders on stocks that had rallied in the past few
days, especially on telecommunications and mining firms

Foreign brokerage firms like Merrill Lynch Indonesia, ING
Barings Securities and GK Goh Ometraco Securities were net
sellers, brokers said.

The Jakarta Stock Exchange (JSX) Composite Index fell 3.44
percent or 10.79 points to 303.19 on a total turnover of 177.02
million shares changing hands valued at Rp 205.62 billion
(US$23.10 million).

Losers outpaced gainers 65 to 21 with 78 shares unchanged.

PT Telkom slid Rp 150 to close at Rp 1,850 on 24.53 million
shares traded, Indosat shed Rp 675 to Rp 6,825 on 2.11 million
shares changing hands and gold and nickel producer PT Aneka
Tambang fell Rp 75 to Rp 1,350 on 17.05 million shares traded.

Associate director of Bahana Securities Andre Cita said that
foreign investors, who remained scared about entering the
country's shattered financial market, were not yet tempted to
risk their funds here due to political and economic
uncertainties, especially on account of local companies' huge
debts.

"Foreign investors are scaling back from the market due to
bleak corporate earning prospects here," he said.

He said that even though the political situation had been
relatively calm over the past few days, foreign investors'
confidence had not improved yet.

"Investors will closely watch the political situation at
home," he said citing peaceful student demonstrations in the
capital on Wednesday.

Three hundred university students marched through downtown
Jakarta on Wednesday demanding President B.J. Habibie lower
escalating food prices or step down.

Bahana's Cita said that the Indonesian government had to
resolve its huge economic and political problems before it could
expect foreign investors to return to the market.

"There are a lot of problems that will keep the market under
continued selling pressures," he said.

But unlike stocks, the rupiah continued its bullish charge on
Wednesday closing slightly higher at 8,800 against the American
dollar after hitting an intraday high a 8,725.

Currency dealers said that limited dollar-selling by state and
offshore banks, especially from Singapore, gave a big boost to
the rupiah against the American dollar on Wednesday.

"It is just strange for me that Singapore banks placed large
dollar-selling orders today," a chief dealer with a local private
bank said.

Currency dealers said improving sentiment on the rupiah was
boosted by IMF director for the Asia-Pacific Region Hubert Neiss'
statement praising the government's progress in implementing
economic change.

"But I think the strengthening of regional currencies prompted
investors to unload their dollars," another dealer said. (aly)