Indonesia's Stocks Decline; Telkom, Bank Niaga Lead Slides

Indonesia's key stock index fell for the first day in four. PT Telekomunikasi Indonesia and PT United Tractors slipped as some investors judged recent gains outstripped earnings potential.

``With the market being so volatile, investors were jittery and locked in profits after a few days of gains,'' said Felix Sindhunata, head of research at PT Mega Capital Indonesia in Jakarta.

PT Bank Niaga (BNGA) fell after Citigroup Inc. reduced the stock to ``hold'' from ``buy,'' citing the outlook for slower earnings growth due to tougher competition for mortgage customers. PT Bank Mandiri rose after reporting that earnings beat analyst estimates.

The Jakarta Composite Index (JCI) slipped 6.98, 0.4 percent, to close at 1764.58. It earlier rose as much as 0.7 percent and fell 0.7 percent. Losing stocks led gainers 87 to 37. The benchmark ended this week 0.3 percent higher, its first weekly increase in three.

The index rose 4.3 percent over the previous three days, after falling to a seven-week low on March 5 as disappointing reports on the U.S. economy extended a global selloff in stocks. The measure's rebound on March 6 was also helped by Bank Indonesia's decision to cut its key interest rate.

Telekomunikasi, the nation's largest telephone company, lost 100 rupiah, or 1.1 percent, to 9,200, snapping a three-day, 3.3 percent advance. United Tractors, Indonesia's largest seller of heavy equipment, fell 100 rupiah, or 1.4 percent, to 7,150, after gaining 8.2 percent in the previous three days.

PT Bank Internasional Indonesia, Indonesia's sixth-largest lender by assets, retreated 5 rupiah, or 2.5 percent, to 192. The stock jumped 8.2 percent over the previous three days on expectations lower borrowing costs will boost demand for loans.

Mandiri Gains

Bank Niaga, Indonesia's second-largest mortgage provider, slid 20 rupiah, or 2.5 percent, to 790, halting a three-day, 11 percent jump. Analysts at Citigroup Inc., Robert Kong and Nawal Nely, yesterday lowered their recommendation on the stock to ``hold'' from ``buy.''

``As a top mortgage player, Niaga may face margin pressure from lower mortgage rates, which fell from 15 percent in Sept. 2006 to 12 percent,'' Kong and Nely wrote in a note yesterday.

Mandiri, Indonesia's largest lender by assets, jumped 75 rupiah, or 3.2 percent, to 2,425.

Mandiri said yesterday net income in 2006 quadrupled to 2.42 trillion rupiah ($264 million) from 603.4 billion rupiah on higher lending and lower loan-loss provisions. That exceeded the median 2.1 trillion rupiah forecast of six analysts in a Bloomberg News survey.

``Mandiri can book higher earnings this year with lower bad loans and increases in lending,'' said Bagus Hananto, an analyst at PT Andalan Artha Advisindo Sekuritas in Jakarta.

Elsewhere, PT Trimegah Securities (TRIM), Indonesia's second-largest brokerage by value, lost 5 rupiah, or 3.4 percent, to 144.

Oversea-Chinese Banking Corp., Singapore's third-largest lender, said its Excel Holdings Pte unit won't pursue a plan to purchase a 29.5 percent stake in Trimegah. Excel hasn't received approval from Indonesian authorities, and an agreement to buy the stake ``has lapsed,'' it said in an e-mailed statement.

To contact the reporters on this story: Naila Firdausi in Jakarta at nfirdausi@bloomberg.net.

To contact the editor responsible for this story: James Regan in Hong Kong at jregan8@bloomberg.net

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