Indonesian stocks fell, with the benchmark index dropping to its lowest close in 13 months, after the finance minister said the nation’s economy will grow less than a government forecast.
The Jakarta Composite Index fell 2 percent to 4,837.794, its lowest close since May 2014. The measure has declined more than 12 percent from a record high on April 7.
Finance Minister Bambang Brodjonegoro said Monday the Indonesian economy is expected to grow 5.4 percent at the most this year, lower than 5.7 percent forecast in the state budget that was approved by the parliament in February. The government will strive for an expansion rate of 5.2 percent for the full-year, and can only provide little support during the second-quarter growth, he said.
“The bearish sentiment on Indonesian equities is continuing,” Jeffrosenberg Tan, fund manager at PT Sinarmas Asset Management, said by phone on Monday. “Investors still see structural reform policies from the government coming in below expectations.”
With the government’s biggest reforms making little headway in a nation fraught with corruption and political jockeying, President Joko Widodo has turned to tweaks in taxes and regulation in an effort to revive waning Indonesian growth. He is for now pinning hopes on steps such as removing the luxury tax on golf clubs and horse saddles, and ordering toll road operators to cut tariffs for Eid al-Fitr.
PT Bank Mandiri dropped 4.8 percent to an eight-month low, the biggest drag on the main index on Monday. PT Astra International retreated 3.2 percent after monthly motorcycle sales in May fell to their lowest volume since August 2012. PT Unilever Indonesia declined 2.2 percent.