Indonesian shares end down on news of fuel price hike plan
Indonesian shares end down on news of fuel price hike plan
Dow Jones, Jakarta
Indonesian shares ended lower Thursday, hurt by news that the
government plans a single, sharp increase in fuel prices early
next year, dealers said.
Sri Mulyani Indrawati, minister for national development
planning, told the Asian Wall Street Journal that the price
increase would probably occur between early February and April,
when Indonesia's seasonal inflation pressures are low because of
agricultural harvesting.
But analysts said higher fuel prices could exacerbate
inflation and hurt companies.
Dealers also attributed selling to worries that the central
bank may further lift interest rates to stem rising inflation.
"These negative factors are a good excuse for mid-term
investors to take profits," said an analyst with Kuo Capital
Securities. The main index has risen around 38 percent since the
start of the year.
The Jakarta Stock Exchange Composite Index ended down 15.423
points, or 1.6 percent, at 963.797.
Decliners led gainers 113 to 31, with 74 stocks unchanged.
Volume was 1.75 billion shares valued at Rp 1.5 trillion,
compared with 3.9 billion shares valued at Rp 2.8 trillion
Wednesday.
Bellwether Telekomunikasi Indonesia led the decliners, falling
3 percent to Rp 4,900 and its rival Indosat ended down 1.7
percent, at Rp 5,750.
Dealers said concerns about higher interest rates spurred
investors to continue to sell bank stocks.
The central bank Wednesday raised the interest rate on its
benchmark one-month Bank Indonesia notes to 7.43 percent from
7.41 percent. Higher interest rates could raise banks' interest
costs and hurt their overall financial performance, analysts
said.
Bank Danamon fell 3.4 percent to Rp 4,225, Bank Mandiri
dropped 2.6 percent to Rp 1,900 and Bank Negara lost 1.6 percent
to Rp 1,525.
Dealers said they expect the market to trade lower Friday.
Meanwhile, the rupiah ended higher, as investors consolidated
their positions after a recent sharp rise in the dollar, dealers
said.
The dollar ended at Rp 9,150, down from its close at Rp 9,195
Wednesday, an 11-week high.
"Many players consolidated their positions after the dollar
entered an overbought area," said a trader with a foreign bank.
The dollar hit an intraday high of Rp 9,208.
He said foreign investors, mostly from Singapore, also sold
the dollar to realize profits after its rally Wednesday.
Dealers said growing demand for the greenback from local
importers for bill payments, however, put a brake on the rupiah's
rise.
They expect the dollar to trade between Rp 9,125 and Rp 9,175
Friday.