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.