Jakarta stocks drop on unrest concern<\/p>\n
Bloomberg, Jakarta<\/p>\n
Indonesian stocks fell for the first day in three on Wednesday on
\nconcern government plans to raise fuel prices later this week
\nwill spark unrest amongst the nation's poor. PT Telekomunikasi
\nIndonesia led declines.<\/p>\n
\"There will definitely be demonstrations, creating concerns\"
\nabout riots, said Bambang Setiadi, who helps manage the
\nequivalent of US$140 million in assets at PT Sinar Mas Sekuritas
\nin Jakarta.<\/p>\n
Higher fuel prices mean companies \"face higher costs while
\nconsumer purchasing power will decline.\"<\/p>\n
The Jakarta Composite Index fell 9.75, or 0.9 percent, to
\nclose at 1,027.89.<\/p>\n
Parliament late on Tuesday approved the government's plan to
\ncap this year's fuel subsidies at Rp 89.2 trillion ($8.6
\nbillion), paving the way for President Susilo Bambang Yudhoyono
\nto raise fuel prices on Oct. 1.<\/p>\n
Telekomunikasi, the nation's biggest telephone company, fell
\nRp 50, or 1 percent, to Rp 5,150. PT Kalbe Farma, the biggest
\ndrugmaker by sales, lost Rp 20, or 2.4 percent, to Rp 820. PT
\nRamayana Lestari Sentosa, the country's second-biggest retailer
\nby sales, slipped Rp 20, or 2.6 percent, to Rp 760.<\/p>\n
PT Astra International, Asia's biggest auto retailer by value,
\nlost Rp 300, or 3.3 percent, to Rp 8,850 on concern higher fuel
\nprices will cut demand for cars and motorcycles.<\/p>\n
The government is allocating Rp 4.8 trillion to 15.5 million
\npoor families to compensate them for the fuel price rise and
\npreempt protests.<\/p>\n
Many poor people rely on government subsidized fuel and an
\nattempt to increase tariffs in 1998 contributed to protests that
\ntriggered the ouster of former dictator Suharto.<\/p>\n
Subsidized gasoline sells for less than half the international
\nprice.<\/p>\n
Still, the government needs to cut the cost of subsidies to
\nstop a drain on the nation's finances. The Jakarta Composite
\nIndex has dropped 15 percent in dollar terms the past three
\nmonths as investors fret Indonesia won't be able to afford to
\ncontinue subsidizing fuel with oil prices at record levels.<\/p>\n
Indonesia, the only member of OPEC that is a net oil importer,
\nhas seen the rupiah lose 6.8 percent of its value the last three
\nmonths as the cost of crude imports increase. Oil has surged 49
\npercent on global markets this year.<\/p>\n
PT Bank Danamon, the country's fifth-biggest lender by assets,
\nslipped Rp 50, or 1.3 percent, to Rp 3,850 on concern higher
\ninterest rates will boost costs to pay depositors. PT Bank
\nCentral Asia, the second-biggest, declined Rp 75, or 2.2 percent,
\nto Rp 3,325.<\/p>\n
The following stocks also rose or fell in Jakarta. Stock
\nsymbols are in parentheses after company names.<\/p>\n
PT Hexindo Adiperkasa, which sells Hitachi Construction
\nMachinery Co's tractors and other heavy equipment, jumped Rp 60,
\nor 5.6 percent, to Rp 1,140, its biggest gain since Aug. 30.<\/p>",
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