Stocks, rupiah indifferent to Akbar furor

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.