Key index falls, Mandiri leads declines

Key index falls, Mandiri leads declines

Arijit Ghosh, Bloomberg/Jakarta

Indonesia's key stock index fell, snapping a 7.8 percent, eight-
day winning streak. PT Bank Mandiri led declines in lenders on
concern a 20 percent rally in financial shares in the past month
had been excessive.

The Jakarta Composite Index fell 8.31, or 0.7 percent, to
1173.71 at the 4 p.m. close after declining as much as 1.4
percent. The eight-day winning steak was the longest in 10
months. Two shares fell for every one that rose in the index.

An index that tracks financial stocks declined 1.2 percent on
Wednesday, its biggest drop since Nov. 14, and was the biggest
contributor to the benchmarks drop.

Banks stocks have rallied in the past month after the central
bank raised its key interest rate, used as a reference for bill
sales, by a less-than-expected half-a-percentage point on Dec. 6
and said it may start to cut rates in the second half of next
year.

The gains in the banking sector in the past month have been "a
bit too hasty," said Mulya Chandra, an analyst at PT Danareksa
Sekuritas in Jakarta. "Though we are optimistic about 2006 year-
end projects, there could be temporary down cycles in the near
term."

Bank Mandiri, Indonesia's biggest bank by assets, lost Rp 40,
or 2.4 percent, to Rp 1,620. The stock has climbed 35 percent in
the past month. Its 14-day relative strength measure, derived by
averaging out daily gains and losses, had a reading of 81.4 on
Tuesday, higher than 70 which indicates to some investors that
the stock is poised to fall.

PT Bank Central Asia, Indonesia's biggest bank by market
value, dropped Rp 100, or 2.9 percent, to Rp 3,400. PT Bank
Rakyat Indonesia lost Rp 25, or 0.8 percent, to Rp 3,075.

"The corporates we are meeting, no one is telling us that it
will be a great quarter," said Erwan Teguh, head of research at
PT Danareksa Sekuritas in Jakarta. We are telling investors "not
to sell, but not to chase stocks either. Our market is not
cheap."

PT Astra International, the nation's biggest car retailer,
gained Rp 300, or 2.9 percent, to Rp 10,600 after a minister said
the government should delay a proposed tax increase on vehicles.
Minister of Industry Fahmi Idris wants the government to delay or
revise a planned tax increase on vehicles, Bisnis Indonesia
reported, citing the minister.

The government said last month it will raise taxes for buyers
of sedans with an engine size of 1.5 liters to 3 liters to boost
revenue and reduce the budget deficit.

PT Aneka Tambang (Antam), a mining company 65 percent owned by
the government, plunged Rp 250, or 6.9 percent, to Rp 3,375. The
company is seeking investors to help develop its Cikotok gold
mine in Banten province, Koran Tempo reported, citing Tarjuki, a
company spokesman. Cikotok may be closed because of declining
output, the report said.

PT Astra Agro Lestari rose Rp 50, or 0.9 percent, to Rp 5,700.
Indonesia's biggest publicly traded agricultural company said its
crude palm oil output rose 11.2 percent in the first 11 months of
this year. Production of the edible oil rose to 776,761 metric
tons in the period ended Nov. 30, from 698,819 tons a year
earlier, the company said.

PT Indofood Sukses Makmur rose Rp 20, or 2.1 percent, to Rp
960. The world's biggest instant noodle maker, aims to boost its
market share in Indonesia to more than 75 percent next year, said
Taufik Wiraatmadja, a company director.