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."