Stocks fall as inflation climbs to six-year high<\/p>\n
Naila Firdausi, Bloomberg\/Jakarta<\/p>\n
Indonesian stocks fell after increased fuel costs sent inflation
\nto a six-year high last month. PT Bank Central Asia (BCA) and PT
\nAstra International led declines.<\/p>\n
Bank Indonesia (BI) raised a benchmark interest rate to a
\nthree-year high after the release of the inflation report.<\/p>\n
\"Inflation was way above my expectations and even beat Bank
\nIndonesia's estimate,\" said Irvin Patmadiwiria, head of research
\nat PT Batavia Prosperindo Aset Manajemen in Jakarta, which
\nmanages about US$150 million in assets.<\/p>\n
\"Investors may want to sell their stocks\" on interest-rate
\nconcerns.<\/p>\n
The Jakarta Composite Index slid 1.27, or 0.1 percent, to
\nclose at 1,064.95. Declining stocks led gainers 49 to 33. The
\nstock market will be closed on Wednesday through Nov. 8 for the
\nIdul Fitri holiday.<\/p>\n
Consumer prices in Southeast Asia's largest economy climbed
\n17.9 percent in October from a year earlier after a 9.1 percent
\nrise in September, the Central Statistics Agency (BPS) said on
\nTuesday.<\/p>\n
That's faster than the median forecast of 13.3 percent in a
\nBloomberg survey and the highest since June 1999. The government
\nmore than doubled fuel prices on Oct. 1 to cut subsidy costs.<\/p>\n
BCA, the country's second-largest lender by assets, lost Rp
\n100, or 3.1 percent, to Rp 3,125 on concern higher rates will
\ndamp loan demand. PT Bank Negara Indonesia, the third largest,
\nfell Rp 60, or 4.5 percent, to Rp 1,270.<\/p>\n
PT Indocement Tunggal Prakarsa, the second-biggest cement
\nmaker, slipped Rp 25, or 0.8 percent, to Rp 3,275 on concern
\nhigher lending costs will slow demand for homes and commercial
\nbuildings.<\/p>\n
PT Astra International, Asia's largest auto retailer, fell Rp
\n50, or 0.5 percent, to Rp 9,250. The company sells most of its
\ncars and motorcycles through loans.<\/p>\n
\"Banks and other interest-rate sensitive companies will be
\nhurt the most,\" said Alvin Pattisahusiwa, who helps manage about
\n$196 million at Fortis Investments in Jakarta.<\/p>\n
The index fell as much as 1.1 percent following the release of
\nthe inflation figure. It narrowed its losses after the rupiah
\nstrengthened following the central bank's decision to boost
\ninterest rates.<\/p>\n
The rupiah, which dropped 0.8 percent to a one month-low on
\nthe inflation news, gained 0.1 percent to 10,105 against the
\ndollar.<\/p>\n
PT Indosat, the second-largest telephone company, gained Rp
\n100, or 2.1 percent, to Rp 4,975 on optimism a stronger rupiah
\nwill its foreign-debt burden of $378 million. PT Telekomunikasi
\nIndonesia, the biggest telephone company, rose Rp 50, or 1
\npercent, to Rp 5,050.<\/p>\n
\"BI has to raise rates to prevent the rupiah from sliding,\"
\nsaid Adrian Rusmana, head of research at PT BNI Securities in
\nJakarta.<\/p>",
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