Stocks, rupiah indifferent to Akbar furor
Dadan Wijaksana, The Jakarta Post, Jakarta
The controversial acquittal of House of Representatives Speaker Akbar Tandjung from corruption charges did not have any significant impact on domestic financial markets as both stocks and the rupiah ended firmer on Friday.
The Jakarta Stock Exchange closed nearly 1 percent higher to 773.14 from 766.08 on Thursday on the back of a late rebound in blue chip shares, in what dealers attributed to the cooling down of tension with regard to the Akbar case.
"The fairly contained protests against the (Akbar) conviction helped the market confidence, signaled by a strong rally of selected top shares," a local dealer with a European bank said.
On Thursday, the Supreme Court overturned the graft conviction on Akbar, who is also chairman of the former ruling Golkar Party, sparking criticism and anger nationwide. The decision overturned previous verdicts by the Central Jakarta Court and the Jakarta High Court, both of which found the top presidential rival of President Megawati Soekarnoputri in the upcoming general elections guilty of abusing state funds.
In Jakarta, at least 60 people were injured during nasty clashes with riot police on Thursday.
But on Friday, things were back to normal as sporadic rallies across the country remained fairly peaceful, restoring market confidence.
The local stock market has been in a rally mode for the past several months, sending the index to all-time highs and relatively, one of the top performers in the world. The index has risen by some 10 percent just from the beginning of the year.
State-controlled telecommunications company PT Telkom closed up by Rp 100 or 1.3 percent at Rp 7,650, in contrast with a decline of Rp 200 suffered by another telecommunications company PT Indosat at Rp 18,900 due to heavy profit-taking.
Cigarette giant Gudang Garam also benefited from a late rebound, gaining Rp 150 or 1.1 percent to close at Rp 14,200. In total, gainers led decliners 80 to 42, with 91 stocks unchanged.
Bank Rakyat Indonesia (BRI) and Bank Danamon were also among the gainers, higher by the same margin of Rp 100 to close at Rp 1,625 and Rp 2,575 respectively.
Other stock markets in the region were also generally stronger.
The dealer said that the only thing that could slow down the index movements in the coming days would be widespread profit- taking on recent gains, provided that no major shocks took place relating to the Akbar case.
On the currency market, such sentiment also prevailed with the rupiah slightly strengthening against the U.S. dollar, supported also by gains booked by most currencies in the region.
The local unit ended up at Rp 8,403 per dollar, after closing at Rp 8,417 on Thursday.
The rupiah has remained on par for the past year with the sinking U.S. dollar, which is at all-time lows against other currencies, but despite that the rupiah has decreased slightly over the past few weeks against the sliding greenback.
Bank Indonesia senior deputy governor Anwar Nasution, called on Friday for traders to remain positive and not to become overly worried about the recent weakening of the rupiah.
With ample foreign reserves held by the central bank, it should be able to mount challenge and safeguard the local unit, Anwar said.
Anwar reiterated that the declining Bank Indonesia benchmark interest rate was an evidence that the central bank was confident on the economy. At present, the yield stands at a record low of 7.66 percent.
"It's stable. I think our political condition is relatively stable as well. The number of street rallies has declined, while they are also more organized," he said.