Stocks up 1.5% while rupiah remains stable

JAKARTA (JP): Share prices on the local tattered market rose 1.5 percent on Tuesday after some foreign investors made late buying orders on selected stocks which had been under selling pressures over the past few days, a stockbroker said.

Currency dealers said the rupiah remained stable, closing at 11,100 against the U.S. dollar in moderate dealing.

Stockbrokers and analysts attributed the slight increase in stock prices to a technical rebound as investors took advantage of the improved performance in regional markets such as Hong Kong and Japan.

Bali Securities chief stock dealer Hendra Sunarto said, "The rise is merely a technical rebound as most blue-chip stocks are so undervalued due to selling pressures over the past few days."

The Jakarta Stock Exchange (JSX) Composite Index rose 1.5 percent, or 4.04 points, to 260.87 on a total turnover of 143.34 million shares changing hands valued at Rp 121.52 billion (US$10.95 million).

Gainers outpaced losers 47 to 24 with 93 stocks unchanged.

Hendra predicted that such technical rebounding would prevail in the short-term period.

Swirling market speculation that the government would introduce a capital control system, which had sparked panic selling over the past few days, had not disappeared.

This would cap market technical rebound, he said.

"Market fear of a possible capital control system has not diminished. So, investors are still cautious," Hendra said.

Mashill Jaya Securities head of research, Edhi S. Widjojo, added that foreign investors were still reluctant to enter the local battered market because political and social uncertainty at home had not been restored.

"Though there is no big demonstration in the capital or other big cities, fears of possible demonstrations, and possibly riots in the days ahead has not lessened," he said.

Some experts and government officials have blamed various antigovernment demonstrations and social unrest for the fall in the Indonesian financial market.

Trading activities on Tuesday in the local bourse was marred by a 45-minute demonstration by about 35 people from Porsea, North Sumatra, in front of the JSX building.

They demanded the listed pulp and paper producer PT Inti Indorayon Utama stop its operations after it had employed military personnel to intimidate local people living in Porsea and the surrounding area.

"We want the company to close down its operation," Manahara Siahaan, the speaker of the protest, said Tuesday.

Stock prices of Inti Indorayon Utama closed Rp 25 lower, to close at Rp 125 on a total turnover of 1.19 million shares changing hands.

But big cap stocks which had been heavily sold in the past few days recouped some losses Tuesday, with cigarettemaker PT Gudang Garam soaring by Rp 675 to Rp 4,750 on a total turnover of 3.63 million shares changing hands.

State-owned cement maker PT Semen Gresik also rose Rp 275 to Rp 7,300 on 909.500 shares traded, and state general mining firm PT Aneka Tambang increased by Rp 50 to Rp 1,125 on 6.86 million shares.

Like the stock market, the rupiah remained stable against the dollar Tuesday as most market participants were reluctant to take any new positions amid lack of fresh leads currency dealers said.

The rupiah, which opened 11,100/11,200, closed at 11,000 against the American dollar after it declined to 11,200 due to limited dollar demand by local banks and companies to settle their offshore obligations.

A chief dealer with a local private bank said: "Trading is quiet because no offshore operators are willing to make any new position on the rupiah,"

Dealers said that the rupiah was expected to hover around the 11,000 level in the days ahead. (aly)