Stock index falls to 7-week low; Astra declines
Stock index falls to 7-week low; Astra declines
Soraya Permatasari, Bloomberg/Jakarta
Indonesia's key stock index dropped to its lowest in seven weeks. Auto retailer PT Astra International led declines after the company said vehicle sales are slowing because of higher interest rates.
"Investors may wait a bit longer before deciding to buy Astra again, considering growth in car sales volume is still slowing," said Irvin Patmadiwiria, who helps manage the equivalent of US$35 million at PT Batavia Prosperindo Aset Manajemen in Jakarta.
The Jakarta Composite Index shed 11.25, or 1.1 percent, to 1,017.73 at the 4 p.m. local time close, extending a four-day, 3.5 percent loss. The measure is at its lowest since Sept. 23.
The central bank has raised its benchmark interest rate five times since July, with a record 1.25 percentage point increase on Nov. 1, in order to curb inflation and bolster the rupiah. Inflation reached a six-year high last month after the government raised fuel prices to cut subsidy costs.
Astra, the nation's biggest auto seller, fell Rp 250, or 2.9 percent, to Rp 8,300. "Our car sales started to slow down in August," said Prijono Sugiarto, vice chairman of the Association of Indonesian Automotive Manufacturers and a director of Astra. "Sales may slow down further in the fourth quarter."
PT Bank Negara Indonesia, the nation's third-largest lender, lost Rp 10, or 0.8 percent, to Rp 1,190. PT Bank Mandiri, the largest bank, fell Rp 60, or 4.8 percent, to Rp 1,200. Purchases of vehicles in Indonesia are typically funded by loans.
The economy probably grew 5.1 percent in the third quarter, according to the median forecast of seven economists in a Bloomberg survey. The expansion would be the slowest pace in a year as higher inflation and interest rates curbed consumer spending, which accounts for more than 60 percent of gross domestic product.
PT Bumi Resources, Indonesia's biggest coal exporter, fell Rp 20, or 2.6 percent, to Rp 750. The company's net profit in the first nine months of this year was below expectations because of higher-than-expected financing costs in the third quarter, Macquarie Securities said in a report on Monday.
The company made some payments of loans at two of its units ahead of schedule, resulting in the higher costs, Ahmad Solihin, an analyst at Macquarie, said in the report. Macquarie cut its earnings estimate by 5 percent in 2005, largely reflecting the higher costs, he said.
PT Telekomunikasi Indonesia, the nation's biggest phone company, gained Rp 50, or 1 percent, to Rp 4,975. PT Danareksa Sekuritas maintained a buy recommendation on the stock in a report released on Monday after Telkom reported cellular revenues grew 29 percent in the first nine months of the year.