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)