Testing time again for rupiah, local stocks down 1.7 percent
Testing time again for rupiah, local stocks down 1.7 percent
JAKARTA (JP): The rupiah wavered on Thursday to close at 7,800
against the U.S. dollar from the previous day's Rp 7,600, partly
due to a resurgence in speculative trading, analysts said.
Local stocks also lost ground to end 1.7 percent lower on
profit taking.
Currency dealers said the rupiah, which has hovered around the
7,500 level to the dollar in the past few months, surprisingly
became a fresh target of speculation by certain offshore
investment houses.
"Offshore operators are back in the market ... they want to
test the rupiah," a chief dealer with a private local bank said.
The rupiah fell to an intraday low of 7,850 on the Jakarta
spot market due to fresh speculative attacks by offshore funds.
It ultimately settled at 7,800, 2.6 percent down from Wednesday's
finish.
Dealers said panic buying of the dollar was short-lived and
failed to drag the rupiah through the psychologically important
8,000 barrier because several state banks stepped into the market
to sell dollars.
State banks were seen selling dollars for the rupiah at 7,850
and 7,750, dealers said.
"Such limited dollar selling helped the rupiah to recover
slightly," a dealer said.
Thousands of students took to main streets again on Thursday
in protests demanding former president Soeharto be brought to
trial and the military be held responsible for using violence
against students.
Persistent antigovernment protests will cast a shadow over the
rupiah in the coming days, dealers warned.
Dealers said approval of the International Monetary Fund's
US$957 million loan failed to boost market sentiment on the
currency.
Mirroring the fall in the rupiah, share prices on the local
market plunged, with the Jakarta Stock Exchange (JSX) Composite
index falling 1.7 percent (7.11 points) to 405.58 on a total
turnover of 287.46 million valued at Rp 303.65 billion (US$38.92
million).
Losers led gainers by 81 to 13, with 78 stocks unchanged.
Stock analysts attributed the fall to massive profit taking on
stocks which rallied in previous days and negative impact of the
bearish sentiment in other regional markets.
"Foreign investors have stayed clear out of the local market,"
said Vonny Juwono, an institutional sales broker with Trimegah
Securindolestari.
Fitri Murniati of BNI Securities said lack of fresh leads
ahead of the year-end had forced most foreign investors to take a
wait-and-see attitude for coming days.
"All they want to do is to watch closely the development of
the country's political crisis." She believed that resolving the
country's political and social crisis would be a key factor in
improving the dire economic condition.
Brokers said several blue-chip stocks declined from previous
good showings. State telecommunications firm PT Telkom fell Rp 50
to Rp 2,725 on 6.49 million, pulp and paper producer PT Tjiwi
Kimia slipped Rp 25 to Rp 2,150 on 1.88 million shares,
international call operator PT Indosat slid Rp 275 to Rp 10,325
on 646,000 shares and instant noodle maker PT Indofood Sukses
Makmur fell Rp 25 to Rp 4,175 on 3.03 million. (aly)