Index falls; Gudang Garam, Bank Mandiri slump

Index falls; Gudang Garam, Bank Mandiri slump

Bloomberg, Jakarta

Indonesia's key stock index fell, led by consumer-related shares such as PT Indofood Sukses Makmur and PT Gudang Garam, after the government said it might raise its budget deficit forecast this year because of higher fuel costs.

"The forecast of a higher deficit, though expected as oil prices have risen, adds negative stock sentiment," said Baradita Katoppo, head of research at Kim Eng Securities in Jakarta.

The Jakarta Composite Index fell 5.24, or 0.5 percent, to 1105.98 at the 4 p.m. local time close. Declining stocks led gainers 90 to 39.

The government may raise its budget deficit forecast for 2005 to 1 percent of gross domestic product because of higher oil prices, Coordinating Minister for the Economy Aburizal Bakrie said on Monday.

Earlier budget forecasts targeted a deficit equivalent to 0.8 percent of gross domestic product, based on an estimate of $35 a barrel for oil, he said.

Oil prices rose to a record $58.28 a barrel on April 4, making it more expensive for the government, which subsidizes fuel to make it affordable to the nation's 238 million people.

Gudang Garam, the country's biggest cigarette maker, fell Rp 400, or 2.5 percent, to Rp 15,800. Indofood, the world's biggest maker of instant noodles, lost Rp 10, or 0.8 percent, to Rp 1,190. A higher deficit may put pressure on interest rates to climb, damping consumer spending.

Lenders declined on concerns Bank Indonesia may raise interest rates, damping loan demand. Inflation accelerated to 8.81 percent in March, the fastest in 26 months, the central statistics bureau said earlier this month.

PT Bank Central Asia, the second-biggest lender by assets, slid Rp 25, or 0.7 percent, to Rp 3,400. PT Bank Mandiri, the biggest lender, declined Rp 20, or 1.2 percent, to Rp 1,720.

"There are concerns that interest rates will keep on rising on the higher inflation rate," said Alvin Pattisahusiwa, who helps manage the equivalent of $316 million at Fortis Investments in Jakarta.

Crude oil for May delivery fell for a sixth day, dropping 1 percent to $52.80 a barrel on the New York Mercantile Exchange at 9:24 a.m. London time. That's a decline of 9.4 percent from a record $58.28 a week ago.

PT Medco Energi International, the country's biggest publicly traded oil company, declined Rp 75, or 2.4 percent, to Rp 3,100. PT Energi Mega Persada, the exchange's No. 2 oil company, lost Rp 30, or 3.9 percent, to Rp 740.

PT Bumi Resources, Indonesia's biggest exporter of coal, an alternative fuel to oil, slipped Rp 20, or 2.5 percent, to Rp 790.

Nickel for delivery in three months on the London Metal Exchange fell for a second day on April 8, declining 0.6 percent to $16,100 a metric ton. The contract traded at $16,200 a ton at 9:50 a.m. London time.

PT International Nickel Indonesia, the local unit of the world's second-biggest nickel-mining company, Inco Ltd., fell Rp 200, or 1.3 percent, to Rp 15,100. PT Aneka Tambang, a gold and nickel miner, slid Rp 25, or 1 percent, to Rp 2,400.

PT Pelayaran Tempuran Emas, the smallest shipping company on the Jakarta Stock Exchange by value, rose Rp 100, or 9.4 percent, to a record Rp 1,160. The shares jumped 29 percent on April 8 after Danareksa Sekuritas said the fair value of the shares is Rp 1,675 each.

PT Sumalindo Lestari Jaya, a timber company, surged Rp 180, or 30 percent, to Rp 780, it highest closing price since Jan. 18, 2000.

Sumalindo had a net income of Rp 163.4 billion in 2004, its first profit in six years, it said in a statement published in Bisnis Indonesia newspaper. Sales may rise as much as 15 percent this year, Bisnis reported Monday, citing a director at Sumalindo.

"The rebound in net income last year was significant," said Mardesiana, an analyst at PT Kresna Graha Sekurindo in Jakarta. "The result was very good, and the outlook is also promising."