Stock index declines; Mandiri, Telkom down
Stock index declines; Mandiri, Telkom down
Naila Firdausi, Bloomberg/Jakarta
Indonesia's key stock index fell for a second day on Friday. PT
Bank Mandiri paced declines after Fitch Ratings downgraded the
lender, citing weakening profitability.
The Jakarta Composite Index slid 1.72, or 0.2 percent, to
close at 1,094.65. Declining stocks led gainers 49 to 41. The
benchmark climbed 1.4 percent this week, its second weekly
advance.
Mandiri, the largest lender by assets, lost Rp 20, or 1.4
percent, to 1,450. Fitch Ratings cut the bank's individual rating
to 'D' from 'C/D', Fitch said in a statement today. The downgrade
reflects "weakening of profitability to below-average levels and
recent asset quality weaknesses," Fitch said.
"Banks face rising non-performing loans ratios as interest
rates keep rising," said Ahead Subagja, a director at PT
Recapital Asset Management in Jakarta, which manages about $10
million in equities and bonds.
PT Bank Central Asia, the second-biggest lender, lost Rp 100,
or 2.8 percent, to Rp 3,425. PT Bank Rakyat Indonesia, the
fourth-largest, dropped Rp 75, or 3 percent, to Rp 2,450.
Bank Indonesia, the nation's central bank, on Oct. 4 raised
its benchmark interest rate by 1 percentage point to 11 percent,
a 29-month high, to stem inflation after the government boosted
fuel prices on Oct. 1.
It was the fourth time the central bank had boosted its key
interest rate in nine weeks.
The following stocks also rose or fell in Jakarta. Stock
symbols are in parentheses after company names.
PT Bank Danamon, Indonesia's fifth-largest lender, slid Rp 50,
or 1.2 percent, to Rp 4,025.
PT Excelcomindo Pratama, Indonesia's third-largest cellular
company, advanced Rp300, or 8.7 percent, to Rp3,750. The company
may have its debt rating raised following Khazanah Nasional
Bhd.'s purchase of a stake in the company, Moody's Investors
Service said.
PT Perusahaan Gas Negara, a state-controlled gas distributor,
surged Rp500, or 9.8 percent, to a record Rp5,500. The company
plans to raise prices of gas sold to industrial users on Oct. 15
and next year, it said on Oct. 4.
The price rises lead "us to increase Perusahaan Gas's gas-
price margin by 50 percent in 2006," Angus Graham, an analyst at
CLSA Asia Pacific Markets, wrote in a note to clients dated Oct.
6.
PT Telekomunikasi Indonesia, or Telkom, the nation's biggest
telephone company, dropped Rp 200, or 3.8 percent, to Rp 5,100.
Telkom's American depositary receipts, which consist of 40 shares
each, dropped 4.1 percent to $20.42 on Thursday on the New York
Stock Exchange, equivalent to Rp 5,135 a share, as the rupiah
fell for the first day in three.
The weaker currency raises concern repayments on the company's
$841 million debt will swell.
PT Unilever Indonesia, the biggest maker of food and soap,
climbed Rp 175, or 3.9 percent, to Rp 4,625.
"Unilever has changed its packaging and its marketing strategy
by directly meeting its customers to promote its products," said
Ben Santoso, an analyst at PT Namalatu Cakrawala Securities in
Jakarta.
"Indonesian customers need to see and touch the product for
themselves before buying. It also creates more brand loyalty
because in doing promotions, they normally hand out goodie-bags."