Trading quiet as investors await outcome of IMF talks
Trading quiet as investors await outcome of IMF talks
JAKARTA (JP): Trading activities in the Jakarta Stock Exchange
(JSX) remained lackluster yesterday as investors awaited the
results of talks between the Indonesian government and the
International Monetary Fund (IMF), stock brokers said.
The JSX composite index closed almost unchanged at 504.14
yesterday, after only moderate trading. About 587.82 million
shares worth Rp 476.16 billion (US$46.68 million) changed hands
in regular trade.
Bruce Rolph, head of equities at Bahana Securities, said there
were no fresh incentives from the government to improve market
sentiment in the local bourses.
"Most investors are now waiting for the IMF announcement or
the implementation of a fixed exchange rate," he said.
IMF officials and the Indonesian government have agreed to set
up five working groups to discuss five issues deemed critical to
the country's recovery from the crisis. The five groups will
respectively address monetary policy, bank restructuring, the
budget and subsidies, structural reform and private debt
restructuring issues.
The teams began negotiating yesterday, but there were no clues
to the outcome of the talks.
A broker with BZW Niaga Securities said that foreign brokerage
houses, which have dominated trading in recent weeks, did not
make any significant transactions yesterday.
Eddy Widjoyo of Mashill Jaya Securities said that short-term
local investors entered the market but they limited themselves to
trading in certain stocks.
"It is difficult to judge the direction of the market as most
transactions are driven by speculative motives," he said,
pointing to local investors' enthusiasm for politically well
connected stocks like Citra Marga Nusaphala Persada, Bimantara
Citra, Astra International and Bhakti Investama over the past two
days.
Most blue chip stocks ended lower yesterday. State-owned
telecommunication firm PT Telkom's shares fell by Rp 50 to Rp
3,950, while Indosat's shares dropped Rp 650 to close at Rp
14,050.
Clove cigarette maker Sampoerna's shares also lost ground,
falling Rp 125 to Rp 5,800, while shares in its competitor Gudang
Garam fell Rp 100 to close at Rp 10,950
The rupiah remained stable on the currency market as stock
prices rose, but remained above Rp 10,000 to the U.S. dollar,
dealers said.
The rupiah closed at 10,250/10,275 to the U.S. dollar
yesterday, up from the day's low of Rp 10,400 in the morning.
Dealers said that the rupiah fell during morning trading as a
result of rising dollar demand from local banks and corporations
to cover dollar obligations such letter of credits (L/Cs).
Dealers said the market was now waiting for the government to
introduce much-awaited moves to bolster the beleaguered rupiah
and improve the country's economic outlook.
"People in the market are now waiting cautiously for possible
moves to lift the beleaguered rupiah and improve the country's
ailing economy," a chief dealer with a local private bank said.
(aly)