Uncertainty pushes stocks, rupiah down

Uncertainty pushes stocks, rupiah down

JAKARTA (JP): Shares and the rupiah continued to lose ground
for the second consecutive day yesterday, with stock prices on
the Jakarta Stock Exchange (JSX) down 3.4 percent.

Currency dealers said trading of the rupiah remained thin as
most market operators were discouraged by the country's political
uncertainty.

"Some operators are questioning when and how the country will
hold its next poll next year," a chief dealer with a local
private bank said.

He said the rupiah closed at 11,650/11,850 to the U.S. dollar
in the spot market after touching a day low of 11,900 in the
morning session when a demonstration was held at the U.S. embassy
here.

It was slightly lower than the 11,600 close the previous day.

Dealers said there was no reason for the rupiah to strengthen
against the dollar in the near future due to the country's gloomy
economic outlook and political uncertainty.

The rupiah is expected to weaken to 14,000 levels with
positive incentive in the market.

"Trading activities were thin as most people are still waiting
for the release of the IMF-brokered loan package," the dealer
said.

The International Monetary Fund (IMF) is expected to disburse
the next US$1 billion part of its total $43 billion bailout
package this month to help the country in its dire economic
situation.

"The IMF loan is the only positive news for the country's
market," the dealer said.

The IMF's director for Asia Pacific, Hubert Neiss, was
scheduled to submit his report to the IMF executive director
Michel Camdessus last Monday. The fund's executive board will
make a decision based on the report.

Mirroring the sinking rupiah, stock prices on the Jakarta
Stock Exchange (JSX) fell to 399.59 points on a total turnover of
148.48 million shares changing hands on the regular market worth
Rp 175.45 billion (US$15.25 million).

A broker with Bali Securities, Hendra Sunarto, said trading
activities remained sluggish throughout the day investors were
still worried about entering the country's market for political
and economic reasons.

He said stocks of companies linked to former president
Soeharto's family and the giant Salim Group conglomerate remained
under heavy selling pressure amid a backlash against the Soeharto
clan.

"Most investors continued to discard the stocks to cut the
likelihood of more possible losses."

He said foreign fund managers remained on the sidelines as
major foreign brokerage houses like SBC Warburg, WICarr and
Merrill Lynch securities continued to place large selling orders
on the stocks.

The stock price of Bimantara Citra, controlled by Soeharto's
second eldest son Bambang Trihatmodjo, fell Rp 25 to Rp 325 on a
total turnover of 5.93 million shares, toll road operator PT
Citra Marga Nusaphala Persada (CMNP) closed unchanged at Rp 375
on 4.40 million shares, stock prices of noodle maker PT Indofood
Sukses Makmur shed Rp 425 to Rp 1,150 on a total turnover of 9.13
million shares and the stock price of cement maker PT Indocement
Tunggal Perkasa slid Rp 25 to Rp 2,875 on 442,000 shares.

An analyst with a local securities firm said the country's
persistent political and economic uncertainty led most foreign
fund managers to keep their distance.

"There is no reason for foreign fund managers to enter the
market. All they can do now is watch our political and economic
situation." (aly)