Jakarta, Mar 12: Signs of easing tensions between Indonesia and the IMF helped push Jakarta shares up more than one per cent on Thursday, but the rupiah remained locked in a tight range with investors sidelined ahead of a busy weekend.The packed schedule features visits by Japanese prime minister Ryutaro Hashimoto and a senior IMF delegation, and dealers were also awaiting the naming of a new cabinet by president Suharto.
In Jakarta, officials said a previous plan to send an Indonesian delegation to Washington for talks with the International Monetary Fund had been changed, and a senior IMF delegation would instead travel to Indonesia at the weekend.
IMF sources in Jakarta said the team, to be headed by a senior fund executive, would continue discussions on the reform programme agreed in exchange for a $40 billion bail-out package.
"There is no team going (to Washington), but an IMF team will come here (to Jakarta)," Fuad Bawazier, director general of taxes and strongly tipped to be named the country's new finance minister, told Reuters on Thursday.There was no immediate explanation for the change, and officials gave no further details.
But the word of a pending meeting was enough for Jakarta's share market. The composite index closed up 1.28 per cent, or 6.31 points, at 498.19 on an estimated total turnover of 586 billion rupiah. "There are signs that tensions with the IMF are beginning to ease. Players perceive these signs as quite encouraging," one broker said.
Shares rose in the morning because Suharto's re-election to a seventh five-year term earlier in the week had gone smoothly, traders said. Fresh downgrades of Indonesia's credit ratings by Standard and Poor's overnight did not have much impact on the market, they said.
Overall market sentiment remained firm, and advancers outnumbered losers 86 to 30, with 87 issues unchanged. Meanwhile, European stocks fell on Thursday as investor confidence suddenly drained away after powering markets to record performances in recent days.
London, Frankfurt and Paris were all down by mid-day with overnight declines in Asia undermining the bullish mood. All three hit either trading or closing highs on Wednesday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
