Stock index falls to three-week low

Stock index falls to three-week low

Bloomberg, Jakarta

Key stock index fell to a three-week low. PT Astra International led declines after the company said motorcycle sales slowed in September.

Lenders such as PT Bank Rakyat Indonesia rose after PT Bank Niaga reported higher profit for the first nine months from a year ago.

The Jakarta Composite Index fell 2.88, or 0.3 percent, to close at 1,073.08, the lowest since Sept. 29.

Declining stocks led gainers 59 to 32.

Astra, Indonesia's biggest auto distributor, lost Rp 200, or 2.1 percent, to Rp 9,200. Motorcycle sales in September dropped to 237,039 units from 256,591 units sold in August, the company said on Oct. 21.

"We are concerned that weaker purchasing power could lead to a high default rate on motorcycle financing," Irwan Junus, head of research at PT Mandiri Sekuritas in Jakarta, wrote in a note to clients on Monday.

Motorcycle purchases in Indonesia are typically funded by loans.

The government almost tripled retail kerosene prices, more than doubled the auto diesel tariff and raised gasoline charges by 88 percent on Oct. 1.

Astra International's agricultural unit, PT Astra Agro Lestari, slid Rp 100, or 1.8 percent, to Rp 5,400.

The unit, Indonesia's biggest publicly traded plantations company, said net income in the nine months ended Sept. 30 fell 11 percent to Rp 589.1 billion (US$58.5 million) from Rp 664.7 billion a year ago, as lower palm oil prices cut sales.

Bank Rakyat Indonesia, the nation's fourth-largest lender, jumped Rp 75, or 3.1 percent, to Rp 2,475.

Niaga, the eighth-largest lender by assets, said Oct. 21 that net income in the nine months ended Sept. 30 rose to Rp 436 billion, a 0.2 percent increase from Rp 435 billion a year earlier. The shares added Rp 10, or 2.7 percent, to Rp 375.

"There had been expectations profits at banks would fall on higher interest rates," said Fitri Murniawati, an analyst at PT BNI Securities in Jakarta. With Niaga's results, people now "expect banks to report improved nine-month earnings."

Bank Indonesia, the nation's central bank, has boosted the benchmark interest rate by 2.5 percentage points since July to 11 percent, the highest in more than two years.

Indonesian companies have until the end of this month to report unaudited nine-month earnings.

PT Aneka Tambang, the world's fifth-largest nickel producer, lost Rp 75, or 2.7 percent, to Rp 2,675. Nickel for delivery in three months fell 0.8 percent to $12,000 a metric ton on Oct. 21 on the London Metal Exchange, the lowest close since Sept. 9, 2004.

PT Bank Permata, Indonesia's seventh-largest lender, climbed Rp 10, or 1.8 percent, to Rp 570.

PT Indosat, Indonesia's second-largest telephone company, dropped Rp 200, or 3.7 percent, to Rp 5,150.

PT Perusahaan Gas Negara, a state-controlled gas distributor, added Rp 100, or 1.9 percent, to Rp 5,400.

The company said after the market closed on Oct. 21 that it will raise the price of gas to industrial users a further 11 percent in January. The company last raised its prices on Oct. 15.