Stock index rises; Unilever, BCA gain

Stock index rises; Unilever, BCA gain

Naila Firdausi, Bloomberg/Jakarta

Indonesia's key stock index rose for a second day. PT Unilever Indonesia gained after oil prices fell to a four-month low, raising expectations the cost of plastic packaging will decline. Plastic is a derivative of oil.

PT Bank Central Asia (BCA) climbed after Credit Suisse First Boston raised the lender to "outperform," citing benefits from higher interest rates.

The Jakarta Composite Index added 3.75, or 0.4 percent, to 1025.83 at the 4 p.m. local time close. Still, declining stocks led gainers 52 to 34.

Crude oil declined 1.2 percent to US$56.98 a barrel in New York on Tuesday, the lowest close since July 20, on expectations U.S. stockpiles rose last week. Oil was recently at $56.78 in after-hours trade.

Falling "oil prices will lead to lower prices for packaging and will benefit manufacturers like Unilever," said Fitri Murniawati, an analyst at PT BNI Securities in Jakarta.

Unilever, the country's biggest maker of detergents and margarine, rose Rp 100, or 2.4 percent, to Rp 4,300. PT Sari Husada, which manufactures baby food, added Rp 100, or 2.9 percent, to Rp 3,500.

BCA, the country's second-largest lender by assets, rose Rp 100, or 3.2 percent, to Rp 3,200. Credit Suisse raised the stock to "outperform" from "neutral," citing recent declines in the share price and expectations it will benefit from rising interest rates, analyst Roger Lum wrote in a note to clients on Wednesday. Lum said 78 percent of the lender's interest-earning assets are linked to variable rates.

Bank Indonesia, the nation's central bank, on Nov. 1 boosted its key rate to the highest in almost three years after October inflation accelerated at the fastest pace since June 1999. The central bank said on Wednesday that inflation may stay above 10 percent until the end of the third quarter of 2006.

PT Bank Mandiri, Indonesia's biggest lender by assets, fell Rp 70, or 5.9 percent, to Rp 1,110. "Mandiri's non-performing loans will increase as interest rates rise," said Pang Tek Djen, an analyst at PT Sucorinvest Central Gani, in Jakarta. "The lender will have to set aside more for provisions."

PT Aneka Tambang, a gold and nickel miner, added Rp 25, or 1 percent, to Rp 2,425. Gold for immediate delivery in Asia rose as much as 0.8 percent to $472.40 an ounce. It traded at $471.35 at 4:55 p.m. Sydney time.

PT Astra Agro Lestari, Indonesia's biggest publicly traded agricultural company, slipped Rp 50, or 0.9 percent, to Rp 5,300.

Palm-oil for delivery in January on the Malaysian Derivatives Exchange fell 0.5 percent to 1,422 ringgit ($376) a metric ton on Tuesday, the lowest closing price for a most actively traded contract since Oct. 26. The contract traded at 1,413 ringgit a ton at 5:18 p.m. Kuala Lumpur time.

PT Telekomunikasi Indonesia, the nation's biggest phone company, lost Rp 25, or 0.5 percent, to Rp 5,050 on concern earnings will fall. The company plans to reduce the tariff for calls made between Indonesian cities.