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.