Jakarta index little changed; Unilever up

Jakarta index little changed; Unilever up

Bloomberg, Jakarta

Indonesia's key stock benchmark closed little changed. PT Unilever Indonesia had its biggest advance in two months after posting its fastest quarterly profit growth this year.

Lenders such as PT Bank Central Asia and PT Bank Mandiri declined on concern the nation's central bank will keep raising interest rates to stem inflation.

The Jakarta Composite Index rose 0.003 point to close at 1,062.18. It earlier climbed as much as 0.1 percent and dropped as much as 0.7 percent.

Declining stocks led gainers 45 to 37.

Unilever Indonesia, the local unit of the world's biggest maker of detergents and shampoo, jumped Rp 175, or 4.3 percent, to Rp 4,275, its biggest gain since Aug. 19.

Profit in the quarter ended Sept. 30 rose 21 percent to Rp 394 billion (US$40 million) from Rp 326 billion a year earlier.

Sales increased 27 percent to Rp 2.72 trillion.

"The third-quarter result was quite an improvement from the first half," said Katarina Setiawan, an analyst at Kim Eng Securities, who has a "long-term buy" rating on the stock.

"The management has been successful in keeping up growth."

Bank Central Asia, the country's second-largest lender by assets, slid Rp 25, or 0.8 percent, to Rp 3,325.

Mandiri, the largest, declined Rp 20, or 1.5 percent, to Rp 1,320.

Bank Indonesia, the nation' central bank, on Oct. 24 raised its inflation forecast for this year to 14 percent from an earlier estimate of 12 percent because of a government decision to increase fuel prices earlier this month.

It said it may boost interest rates further after raising its key benchmark rate a full point to 11 percent on Oct. 4, the fourth increase in nine weeks.

"With rising interest rates, stock markets don't offer attractive returns," said Mulia Santoso, research manager at the pension fund of PT Bank Negara Indonesia in Jakarta.

"We are now avoiding banking and property" stocks.