Stocks fall on rate concerns; BRI, Astra lead declines
Stocks fall on rate concerns; BRI, Astra lead declines
Bloomberg, Jakarta
Indonesia's stock index dropped 2.2 percent on concern lending costs will climb after the yield on one-month Bank Indonesia bills rose to a 14-month high.
PT Bank Rakyat Indonesia, the nation's fourth-biggest lender, and PT Astra International, the biggest automobile distributor, led declines on concern higher borrowing rates will damp consumer spending and demand for loans.
The Jakarta Composite Index dropped 23.14 points to 1,047.80 at the 4 p.m. local time close, the lowest since Feb. 11. The index has slumped 4.4 percent since April 18. The yield on the central bank's one-month Bank Indonesia bills, used as a benchmark for rates, rose on Thursday to the highest since February 2004.
"People expect interest rates will rise further," said Wiman Kastami, who helps manage the equivalent of $311 million at Fortis Investments in Jakarta.
Bank Rakyat dropped Rp 125, or 4.4 percent, to Rp 2,725. Astra International, the biggest automobile distributor, slid Rp 100, or 0.9 percent, to Rp 10,800. Gaikindo, the nation's association of carmakers, said last year that more than two-thirds of car purchases are funded from loans.
PT Telekomunikasi Indonesia, the nation's biggest telephone company, slid Rp 50, or 1.1 percent, to Rp 4,375 on concern a weaker currency will boost the cost of importing equipment and servicing dollar-debt. The company had $853 million of dollar debt as of September, and imports most of its equipment.
The rupiah fell 0.9 percent to 9,660 against the dollar as of 3:40 p.m. local time. The currency earlier dropped to 9,668 against the dollar, the lowest since April 10, 2002.
The market was closed on Friday for the commemoration of Prophet Muhammad's birthday.
PT Aneka Tambang, an Indonesian gold and nickel miner, lost Rp 50, or 2.2 percent, to Rp 2,225. Aneka cut its scheduled ferronickel production for 2005 by 27 percent to 7,400 metric tons, compared with a previous target of 10,150 tons, after technical problems at a smelter. The shutdown of the company's ferronickel smelter may last as long as six months, Aneka Tambang said Wednesday.
PT Bank Mandiri lost Rp 70, or 4.2 percent, to Rp 1,590. The Indonesian Attorney General's office said loans it's investigating at PT Bank Mandiri, the nation's largest lender, may exceed the Rp 1 trillion (US$103 million) it estimated earlier.
Bank Mandiri spokeswoman Christiana Damanik declined to comment beyond saying the lender would cooperate with the investigation.
PT International Nickel Indonesia, the local unit of Canada's Inco Ltd., fell Rp 350, or 2.6 percent, to Rp 13,250, the lowest since Feb. 16. First-quarter profit dropped 31 percent to $50.9 million, from $73.4 million the year before, the company said in a faxed statement in Jakarta released after the market closed on Wednesday.