Indonesian stocks declined most in Asia and the rupiah weakened after the government unexpectedly reported the biggest trade deficit since at least 2007.
The Jakarta Composite Index fell 2.2 percent to 4,101.234 at the close, after climbing 0.3 percent earlier. PT Indofood Sukses Makmur, the nation’s biggest instant-noodle maker, sank 9.2 percent after it offered to buy China Minzhong Food Corp. The rupiah slid 0.5 percent to 10,979 per dollar and one-month non-deliverable forwards on the currency declined 0.5 percent to 11,497, data compiled by Bloomberg show.
The trade gap in July reached $2.3 billion, exceeding all 16 estimates in a Bloomberg News survey. Indonesia raised its reference rate by half a percentage point at an additional meeting last week, while the government said Aug. 23 it will allow more mineral exports this year as policy makers seek to narrow the trade deficit and stem declines in the rupiah that have stoked inflation. The Jakarta stock gauge lost 9 percent in August and the rupiah weakened 5.9 percent.
“The widening deficit shows how serious Indonesia’s economic condition is,” said Edwin Sebayang, the head of research at PT MNC Securities in Jakarta. “This is what caused the reversal in the stock market.”
Consumer prices climbed 8.79 percent last month from a year earlier after an 8.61 percent gain in July, a separate report from the Statistics Bureau showed today. The increase was the biggest since January 2009 and compared with the 8.95 percent median estimate in a survey of 21 economists.
The nation’s current-account gap widened to a record $9.8 billion in the second quarter, according to central bank data released last month.
Indofood offered to buy the remaining Minzhong stock it doesn’t already own for S$1.12 per share, according to a statement today. Minzhong traded at S$0.53 before it was halted in Singapore. The vegetable processor slumped 48 percent on Aug. 26 after a report by short-seller Glaucus Research Group that questioned the company’s accounts. Minzhong denied the allegations.
PT Astra International, Indonesia’s biggest auto retailer, fell 2.5 percent. PT Unilever Indonesia declined 1.9 percent. PT Bank Mandiri, the nation’s largest lender by assets, retreated 5.6 percent.