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.