Stock index has biggest drop on oil price
Stock index has biggest drop on oil price
Bloomberg, Jakarta
Indonesian stocks fell, dragging the Jakarta Composite Index
to its biggest loss in a month, on concern that record high oil
prices may slow economic growth. PT HM Sampoerna and PT
Telekomunikasi Indonesia led declines.
The index dropped 6.234, or 0.7 percent, to 849.826 at the 4
p.m. close in Jakarta. It was the biggest percentage drop since
Sept. 9. In all, 54 shares fell, 62 rose and 221 were unchanged.
The government subsidizes fuel costs, especially kerosene for
the poor. Half of Indonesia's population lives below the poverty
line, the World Bank says. The annual fuel subsidy now stands at
an estimated Rp 59.2 trillion (US$6.5 billion), from the Rp 14.5
trillion planned at the beginning of the year, or enough to pay
the budget deficit 2.3 times over.
"Rising oil prices will slow growth as the government must
switch spending to fund the swelling fuel subsidy," said Fitri
Murniawati, an analyst at PT BNI Securities in Jakarta.
The central bank has said it may raise interest rates to curb
inflation. Higher interest rates draw investors from equities to
bonds.
Sampoerna, the country's second-largest publicly traded
cigarette maker, fell Rp 250, or 4.1 percent, to Rp 5,850.
Telekomunikasi, the country's biggest telephone company, fell Rp
25 rupiah, or 0.6 percent, to Rp 4,275.
Bank Rakyat Indonesia, the fourth-biggest lender by assets,
fell Rp 75, or 3.5 percent, to Rp 2,075. Bank Central Asia, the
second largest, fell Rp 25, or 1.1 percent, to Rp 2,250.
Crude oil for November delivery rose as much as 0.4 percent to
$52.24 a barrel in after-hours electronic trading on the New York
Mercantile Exchange, the highest since the futures began trading
in 1983. It was at $52.21 at 12:17 p.m. Singapore time.
Bank Permata, the nation's seventh-largest lender, rose Rp 25
rupiah, or 2.5 percent, to Rp 1,025. The government will name a
preferred bidder for a 51 percent stake in the state- controlled
lender tomorrow.
PT Ramayana Lestari Sentosa, the biggest retailer by value,
fell Rp 75, or 1.7 percent, to Rp 4,425 on a report that it had
slower-than-expected sales. Ramayana indicated that sales in
August were Rp 278.8 billion and Rp 76 billion in September, said
Rani Sofjan, an analyst at PT Mandiri Sekuritas, in a note to
clients.
Both figures "were below management targets," Sofjan said. "We
are likely to downgrade our Ramayana earning estimates for this
year."