Jakarta Index Opens Lower, Rupiah Falls

Jakarta (Antara Bali) - The Jakarta composite index (JCI) opened slightly lower on Friday on expectation the world crude oil price would shrink further, analysts said.

The index of the Indonesian Stock Exchange 9BEI) fell 1.53 points or 0.03 percent to 5,151.16 points with index of 45 most liquid stocks down 0.04 percent to 886.09.

Head of Research of Valbury Asia Secuirites Alfiansyah said the market feared that the world oil prices would shrink to a five year low putting pressure on the JCI.

"The oil price fall would trigger fear of falling performance of the energy sector including coal  and metal mining  industry," Alfiansyah said.

In addition, many investors began to reduce market activities with the closing Christmas  and year end holidays.

He said the  central bank's decision to maintain its benchmark interest rate at 7.75 percent could serve a bring about positive sentiment as it indicate inflation would be under control.

At 09.30 local time, the JCI rose to a positive territory  rising 7.79 points or 0.15 percent to 5,160.37 points.

Regional markets such as Hang Seng   and Straits Times recorded an increase in indices but Nikkei recorded a decline.

Meanwhile rupiah weakened against the US dollar trading in the morning trade at the level of 12,427  from 12,350 per dollar earlier.

Chief researcher of  Monex Investindo Futures Ariston Tjendra said the US dollar continued its appreciation on risk aversion sentiment in emerging markets including in Indonesia.

Some market players tended to sell risky currencies  to keep  the US dollar for safety, Ariston said.

The fears of the market players followed the oil price fall in the world market.

"However, the pressure on the currencies of emerging markets is short term that it would not cause significant damage to investment sector in the country," he said.

Chief Investment Officer of CIMB Principal Asset Management (CPAM), Cholis Baidowi, said the rupiah still performed better than other Asian currencies.

"The government policy of raising the prices of subsidized oil fuels (BBM) in mid November significantly reduced the pressure on rupiah," Cholis said.

The rupiah fall also would not add significant burden to the state budget that the room for expansion in infrastructure development remains good, he added. (WDY)