Stocks rebound as rupiah stays flat against dollar

Stocks rebound as rupiah stays flat against dollar

JAKARTA (JP): The rupiah was stable yesterday at the 14,000
level against the U.S. dollar while stock prices made a surprise
1.2 percent gain on improving sentiment in regional markets,
dealers and stockbrokers said.

Currency dealers said the dollar-rupiah trade was sluggish as
market players were reluctant to take positions ahead of the
weekend.

The rupiah closed at 14,075 against the dollar in the Jakarta
spot market, almost unchanged from its close Thursday.

"The market was so dull. Most operators were reluctant to
speculate on this particular weekend because at this time we
still have concerned over possible riots on Monday," a chief
dealer with a local private bank said.

Market players fear that the planned commemoration by
opposition figurehead Megawati Soekarnoputri of the second
anniversary of bloody riots following the takeover of her
Indonesian Democratic Party headquarters in Jakarta on July 27
1996 could turn violent.

"It is of utmost importance for the Armed Forces to maintain
security and order because the current widespread lawlessness
would derail our currency into negative territory," the chief
dealer said.

If the expected riots do occur, dealers said, the rupiah could
tumble again, but if not, the currency would be steady at the
current level as the market is still awaiting the outcome of
Indonesia's donors meeting in Paris later next week.

The donor group is expected to provide a significantly larger
loan this year than the $5.3 billion it gave Indonesia last year.

The steady rupiah and stronger regional markets led shares on
the Jakarta Stock Exchange out of the red to close mostly higher
yesterday in moderate trading.

Positive sentiment rippled around the region following the
election of Japanese Foreign Minister Keizo Obuchi as the
president of Japan's ruling Liberal Democratic Party, making him
almost certain to become Japan's prime minister.

Jakarta's main price index, the JSX Composite Index, closed
5.758 points higher at 479.563. The volume was 247.39 million
shares valued at Rp 372.47 billion.

Stockbrokers said domestic investors dominated trading
yesterday as foreign investors had shown only a little interest.

Sigma Batara Securities' research head Fadjar Limin Sutandi
said the drive of the market was still state-owned companies
plagued by privatization issues, like mining firm PT Aneka
Tambang and tin miner PT Tambang Timah.

Local investors shorted Aneka Tambang in the morning,
expecting the share price to continue its decline, and scrambled
to cover short positions in the second session which caused its
share price to increase.

Aneka Tambang's shares gained Rp 150 to close at Rp 2,575 on
58.2 million shares changing hands. Meanwhile, Tambang Timah
jumped Rp 600 to Rp 8,900 on 644,000 shares trade.

Dealers said the main price index was boosted by buying in
market heavyweight state telecommunications firm PT Telkom, which
accounts for 17 percent of market capitalization.

Telkom rose Rp 25 to Rp 4,375 on 7.98 million shares traded,
while state satellite operator PT Indosat climbed Rp 125 to Rp
15,600 on 71,000 shares.

Cigarette giant PT Gudang Garam, however, dropped Rp 100 to
close at 8,600 on 232,000 shares traded, while competitor PT HM
Sampoerna ended unchanged at Rp 3,000 on 4.8 million shares.
(rid)