Stocks take tumble but rupiah holds its ground
Stocks take tumble but rupiah holds its ground
JAKARTA (JP): The rupiah maintained strength yesterday,
staying at 14,200 against the U.S. dollar, while stock prices on
the Jakarta Stock Exchange (JSX) dropped 2 percent on continuing
profit taking and security concerns.
Currency dealers said the rupiah rebounded slightly in late
trading with the focus on Indonesia's donors meeting in Paris
next week.
"The market is directionless, with the market focusing on next
week's donors meeting in Paris," a dealer with a local private
bank said.
Dealers said the rupiah touched the day low of 14,300 against
the U.S. dollar in morning trading, tracking the yen which fell
through the 141 level against the dollar.
However, anticipation of a good outcome in Paris seemed to
help cap rupiah's downside, dealers said.
The rupiah closed at 14,200/250 yesterday, compared to an
opening of 14,000/200. The currency closed Wednesday at 14,100.
Bank Indonesia also supported the rupiah by keeping its
intervention rate in the money market at 70 percent per annum for
one-month funds.
Dealers said the short-term outlook for the rupiah was not
quite bright because the market was especially concerned over
possible rioting coinciding with the planned commemoration by
opposition figurehead Megawati Soekarnoputri of the riots which
followed the takeover of the Indonesian Democratic Party's
Jakarta headquarters by a rival group on July 27, 1996.
Megawati's faction plans to carry on with the commemoration on
Monday even though the police have refused to issue a permit for
the gathering.
Similar concerns over possible rioting in the capital city on
Monday were shared by fund managers in the stock market,
stockbrokers said.
Bahana Securities' associate director and head of equity
sales, Andre Cita, said some foreign fund managers decided to
stay away from the market because of possible rioting.
"I think there are people who are concerned that a situation
may develop as we draw close to July 27. Some fund managers are
getting cautious about the market and moving to the sidelines
until things are clearer," Cita said.
Jakarta main price index, the JSX Composite Index, fell 9.250
points to 473.805 on a volume of 249.6 million shares worth Rp
323.84 billion (US$22.8 million).
Losers led gainers by 87 to 23.
Stockbrokers said domestic investors, which had dominated the
local market for some time, had turned into net sellers yesterday
as they took profits.
Cita added that many foreign investors had also sold their
stock holdings to protect their positions while they left for
their summer vacations.
"Some fund managers I talked to have started to take their
vacations. You know this is a major vacation time for foreign
fund managers and some of them do not want to have too much
exposure to Indonesia while they are away."
He added that the absence of news or rumors on the
privatization of state firms was also responsible for the
weakening of the stock price index yesterday.
"The market was boosted previously by privatization issues.
Without privatization stocks leading the market, we have no
leadership," he said.
State firms previously coveted by local investors due to their
privatization issues like Semen Gresik, Tambang Timah and Aneka
Tambang all suffered losses yesterday.
Cement manufacturer Semen Gresik dropped Rp 450 to close at Rp
11,500 on 707,000 shares changing hands, general mining company
Aneka Tambang shed Rp 325 at Rp 2,425 on 34.65 million shares,
and tin miner PT Tambang Timah dipped Rp 600 at Rp 8,300 on 1.3
million shares. (rid)