Stocks, rupiah up on growing optimism
Stocks, rupiah up on growing optimism
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
rose 1.7 percent yesterday on growing market speculation that the
government would soon peg the rupiah to the U.S. dollar at a
fixed rate, stockbrokers said.
They said the market also anticipated that the new cabinet
ministers, to be announced by President Soeharto this morning,
would soon give an impetus to solve the crisis.
After appointing the cabinet lineup, President Soeharto would
likely introduce a fresh move early next week to mend the
country's paralyzed economy, stockbrokers said.
"I think many people in the market are optimistic that the
President will soon move to establishing the currency board
system or just fixing the rupiah's rate against the dollar," a
broker with a joint-venture securities said.
He said the market saw that the stalemate between the
government and the International Monetary Fund over the former's
plan to introduce a currency board would eventually ease after
talks between Soeharto and visiting Japanese Prime Minister
Ryutaro Hashimoto this weekend.
Harita Securities president Christina Lim said stock prices
improved because the market also expected that the new cabinet
would soon give clear direction on how the government would deal
with the crisis.
"Hopefully, we will see that direction very soon, after the
announcement of the new cabinet ministers," she said.
Stockbrokers said trading activities remained moderate for the
whole trading day yesterday though several foreign brokerage
houses were making big buying orders on certain blue chips.
Brokers said leading foreign brokerages houses like Indosuez
WICarr, Merrill Lynch, Jardine Fleming Nusantara, SBC Warburg,
Credit Lyonnais were net buyers.
The JSX Composite index closed up 8.54 points to 506.73
yesterday from the previous day's 498.18.
Trading volume reached 468.65 million shares, changing hands
on the regular market worth Rp 489.10 billion ($47.02 million).
Tracking the rise of stock prices, the rupiah strengthened
slightly against the dollar in moderate transactions.
The rupiah closed at 10,400 against the dollar yesterday, up
from the previous day's close of 10,500, currency dealers said.
"Nobody wants to make any transaction when the market
remains uncertain like this," a local bank chief dealer said.
He said most foreign operators, especially from Singapore, had
squared their positions ahead of the weekend.
However, some operators were seen selling dollars, in the name
of their clients who want to get rupiah to pay taxes next week.
Dealers said the composition of the new cabinet and the
results of talks between Soeharto and Hashimoto would determine
the fate of rupiah on Monday. (aly)