Stocks, rupiah tremble a little as student protests resume

JAKARTA (JP): The rupiah dipped to 7,600 against the U.S. dollar and stock prices lost 1.1 percent on Tuesday as students resumed large-scale antigovernment demonstrations in the capital.

Currency traders said the rupiah's fall from Monday's close of 7,475 was also due to international market bullishness on the greenback.

A chief dealer at a local private bank said the rupiah was relatively stable for most of the day because players were reluctant to take any new positions ahead of year-end.

"It was late buying by local operators that dragged the rupiah a bit lower," he said.

The currency traded at the 7,550 level during the day before dipping to 7,600 at the close.

The dealer said trading in the local unit was still thin and most offshore players remained on the sidelines.

Any minor intervention by the central bank would effectively boost the rupiah in such a market, the dealer added.

"Limited dollar sales by state banks kept the rupiah at the 7,550 level for almost the whole trading day before late buying drove it down a bit," he said.

Some dealers said the market was actually unmoved by recent localized riots but was more concerned by the possibility that renewed student demonstrations might antagonize the unstable situation.

President B.J. Habibie, speaking at the opening of the national boy scouts' convention, said the stronger rupiah had helped the economy but lamented that the gains were undermined by recent unrest.

"In the last few weeks we have witnessed the strengthening of the rupiah which gives hope for our economic recovery," Habibie said. "But unfortunately this progress has been countered by social and political unrest."

Mirroring the rupiah, share prices on the local market failed to sustain their gains on Tuesday with the main price gauge falling 1.1 percent.

Stockbrokers said massive profit taking on several blue-chip stocks in late trading marked the end of a buying spree in the past few days despite political and social instability at home.

"Massive profit taking has prevented the share prices from continuing their rally," a broker with a local securities firm said.

Sigma Batara Fadjar's head of research Fajar Limin Sutandi believed profit taking was a logical consequence because "stock prices in our market have been overbought".

Stockbrokers said that even though share prices declined, trading activities remained aggressive, involving both foreign and domestic investors.

"Trading activities were good with most counters active," said Vonny Juwono, an institutional sales broker with Trimegah Securindolestari.

She said that some foreign brokerage firms such as Credit Lyonnais, ABN Amro, Jardine Fleming and Vickers Ballas Tamara, which had placed huge funds in the local market in the past few days, continued to enter the market on Tuesday.

"We still see some foreign investors putting more funds in the local market."

But news of a student demonstration in late trading had forced other foreign brokerage firms, like Merril Lynch Indonesia, ING Barings and Trimegah Securindolestari, to cash in profits on the gains they made the previous days, she said.

The Jakarta Stock Exchange (JSX) Composite Index closed 4.90 points lower at 420.080 on a total turnover of 1.37 billion shares changing hands valued at Rp 789.50 billion.

Gainers led losers by 80 to 52, with 76 shares unchanged.

"The buying program by domestic investors has prevented the main price index from declining so sharply," Vonny said.

Most blue-chip stocks, after rallying in the past few days, declined on Tuesday. Market leader telecommunications firm PT Telkom slid Rp 100 to close at Rp 3,050 on 18 million shares traded.

International call operator PT Indosat shed Rp 200 to Rp 11,600 on 11.60 million shares traded, pulp and paper firm PT Tjiwi Kimia slid Rp 75 to Rp 1,775 on 20.34 million shares and automotive firm PT Astra International dropped Rp 25 to Rp 1,150 on 19.24 million shares. (aly)