Stocks fall on rate concern; BRI, Astra lead declines<\/p>\n
Bloomberg, Jakarta<\/p>\n
Indonesian stocks slid, with the key index set to close at a two-
\nmonth low, after the country's benchmark interest rate rose to a
\n14-month high on Thursday.<\/p>\n
PT Telekomunikasi Indonesia and PT Bank Central Asia led
\ndeclines on concern higher lending rates will damp consumer
\nspending and loan demand.<\/p>\n
The yield on one-month Bank Indonesia bills, which is used as
\na benchmark for rates, rose to the highest since February last
\nyear as the rupiah weakened to a near-three-year low.<\/p>\n
\"The jump in the yield makes people expect interest rates will
\nrise further,\" said Wiman Kastami, who helps manage the
\nequivalent of US$311 million at Fortis Investments in Jakarta.
\n\"Bank Indonesia has said it will defend the rupiah from declining
\nand that would be through higher interest rates.\"<\/p>\n
The Jakarta Composite Index dropped 26.46, or 2.5 percent, to
\n1,044.48 at 1:48 p.m. local time, set to close at its lowest
\nsince Feb. 8.<\/p>\n
Stocks also fell after U.S. consumer prices last month rose at
\nthe fastest pace since October, renewing concern the pace of
\ninterest-rate increases in the world's largest economy will be
\naccelerated.<\/p>\n
\"People in the Indonesian market are increasingly concerned
\nabout market risks, such as interest rates,\" said Ross Teverson,
\nwho counts Telkom and Bank Central shares among the $3 billion he
\nhelps manage for Standard Life Investments in Hong Kong.<\/p>\n
Bank Central, the second-biggest lender, fell Rp 75, or 2.2
\npercent, to Rp 3,325. PT Bank Rakyat Indonesia, the fourth-
\nlargest lender, dropped Rp 125, or 4.4 percent, to Rp 2,725.<\/p>\n
PT Astra International, the biggest automobile distributor,
\nslid Rp 250, or 2.3 percent, to Rp 10,650. Most car purchases in
\nIndonesia are funded through loans.<\/p>\n
Telekomunikasi, or Telkom, the nation's biggest telephone
\ncompany, fell Rp 100, or 2.3 percent, to Rp 4,325. The stock also
\nslid on concern a weaker rupiah will boost costs of importing
\nequipment and servicing dollar-debt. The company had $853 million
\nworth of dollar debt as of September, and imports most of its
\nequipment.<\/p>\n
The rupiah slid 0.3 percent against the dollar to 9,616 at
\n1:19 p.m. local time, near a three-year low of 9,621 reached on
\nThursday. It may depreciate to 9,630 in a day or two, said
\nMichael Preiss, senior investment adviser at Coutts Bank
\n(Schweiz) AG in Singapore on Friday.<\/p>\n
The market closed on Friday for the commemoration of Prophet
\nMuhammad's birthday. The index is set to end the shortened week
\n4.7 percent lower, the biggest weekly decline since a 4.9 percent
\ndrop in the period ended June 4.<\/p>\n
PT Aneka Tambang, an Indonesian gold and nickel miner, lost Rp
\n75, or 3.3 percent, to Rp 2,200. Aneka cut its scheduled
\nferronickel production for 2005 by 27 percent to 7,400 metric
\ntons compared with a previous target of 10,150 tons after
\ntechnical problems at a smelter. The shutdown of the company's
\nferronickel smelter may last as long as six months, Aneka Tambang
\nsaid Thursday.<\/p>\n
PT International Nickel Indonesia, the local unit of Canada's
\nInco Ltd., fell Rp 650, or 4.8 percent, to Rp 12,950. First-
\nquarter profit dropped 31 percent to $50.9 million from $73.4
\nmillion the year before, the company said in a faxed statement in
\nJakarta released late Thursday.<\/p>",
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