Stocks recoup their losses, rupiah stays flat
Stocks recoup their losses, rupiah stays flat
JAKARTA (JP): Speculative buying on banking stocks fueled a
1.9 percent gain on the local market on Thursday, but the rupiah
held its own to end the day virtually unchanged.
After a sharp correction of 7.7 percent on Wednesday, the
market was rattled by rumors that the government would soon
announce banks to be merged or liquidated because of their poor
capital position.
Investors scrambled to grab shares of quality banks likely to
escape the purge and dumped those of suspect institutions.
Stockbrokers identified domestic speculative traders in the
thick of the activities.
"All these things are speculative trading. Those speculative
investors believe that some banking shares will improve following
the expected announcement," a dealer with a local securities firm
said.
The Jakarta Stock Exchange (JSX) Composite Index closed 7.295
points higher at 394.678.
Trading volume reached 514.5 million shares worth Rp 333.1
billion (US$44.7 million).
Gainers outpaced losers by 70 to 38, with 75 stocks unchanged.
Shares of Bank Internasional Indonesia were the most actively
traded in terms of volume, gaining Rp 75 to close at Rp 300 on
69.6 million traded.
Bank Panin was a close second with its shares rising Rp 150 to
Rp 475 on 41.98 million traded.
In contrast, the third most actively traded stock was Bank
Ficorinvest, rumored to be on the list of closures. Ficorinvest
stocks slid Rp 25 to Rp 100 on 31.8 million shares.
Most large-cap stocks also gained. Market leader state-owned
telecommunications firm PT Telkom gained Rp 75 to Rp 2,725 on
8.74 million shares traded.
Panin Securities' head of research Anton Karlam said
speculative buying would continue to rule the market because
there was no fundamental argument to place long-term investment.
He predicted that trading in the local market would continue
to be relatively active following the entrance of foreign funds.
Foreign funds have started to reenter emerging markets,
including Indonesia, following banking rate cuts in the United
States, several European countries and also here.
"However, we cannot expect any long-term investment yet. It
remains the 'hot' money which enters this market and which easily
flies away once an unfavorable situation occurs."
He said stability on the political and economic fronts,
especially in the rupiah, would keep fairweather investors here
longer.
In the currency market, meanwhile, trading on the rupiah was
meager and most foreign operators remained on the sidelines.
The rupiah ended Jakarta trading at 7,450 against the dollar,
barely unmoved from Wednesday's close of 7,475.
A chief dealer at a local private bank said: "Today is again
very quite. I did not see any foreign players around. Besides,
local players were also subdued ahead of the year-end."
He said the situation of some state banks selling dollars was
balanced by those buying. "At the end, they had their position
squared."
Dealers said the market would remain quiet on Friday ahead of
the weekend. The dollar is expected to trade between Rp 7,400 and
Rp 7,600. (rid)