http://www.thejakartaglobe.com/business/finance-sector-big-losers-over-bank-indonesia-lending-rates-plan/397139
Finance Sector Big Losers Over Bank Indonesia Lending Rates Plan September 20, 2010 Jakarta. The benchmark stock index lost ground on Monday, falling back from a record on Friday with financial shares being sold off on news the central bank would make moves to boost interest rate competition among lenders. The Jakarta Composite Index fell 13.67 points, or 0.4 percent, to close at 3,370.98. Volume was heavy with 11.9 billion shares worth Rp 5.07 trillion ($562.8 million) changing hands. Gainers edged out losers 111 to 110. Financial stocks were hit hardest after Bank Indonesia Governor Darmin Nasution said on Friday it would require lenders to disclose their prime lending rates, the rates they offer to their most creditworthy customers, to boost competition. The requirement would be implemented by the end of the year, he said. Bank Mandiri, the nation's biggest lender by assets, tumbled 4.4 percent on Monday. Bank Rakyat Indonesia, the second-largest by assets, dropped 1.9 percent and Bank Internasional Indonesia, the biggest overseas unit of Malaysia's largest bank, Maybank, fell 1.6 percent. Made Suardhini, an analyst at Mandiri Sekuritas, said the new rule could lead to reduced net interest margins for lenders. "Bank customers will be in a better bargaining position to ask for lower lending rates," he said. Abdul Ghofur Pahlevi, an analyst at Jakarta-based Andalan Artha Advisindo Sekuritas, said shares also dropped on speculation recent gains were excessive. Coal and plantation stocks gained, however. Bumi Resources, Asia's largest coal exporter, advanced 4.4 percent to Rp 2,025, its highest close since May. Bumi was the most active stock by value. Bayan Resources advanced 2.1 percent to Rp 9,650. Perusahaan Perkebunan London Sumatra Indonesia, the second-biggest listed plantation company in the country, gained 1.5 percent. Palm oil climbed to the highest level in more than a month. December-delivery futures, the most active contract, surged 4 percent to 2,733 ringgit ($881) a metric ton, the most since it started trading on June 17. Cece Ridwanulloh, an analyst at Ekokapital Sekuritas, said that so long as capital inflow was sustained, October's inflation figures would likely be low. Foreign investors still appeared to have an appetite for Indonesian stocks, which could yet keep rising, he added. "Economic recoveries in the US and Europe have not been that strong while Asia's economies are growing rapidly, giving foreign investors a lot of confidence about investing their money with us," he said. Overseas investors pumped $536 million into Indonesian equities last week, boosting net purchases for the year to $2.2 billion and helping drive the JCI to record highs. Meanwhile, the rupiah was little changed, trading at 8,973 per US dollar as of the stock market's close, compared with 8,975 at the end of last week, on speculation the central bank might intervene to limit its gains because it was hurting local exporters. Darmin on Friday said any US dollar purchases would aim to "prevent the rupiah's fluctuations from becoming too big." "Bank Indonesia will come in to cap excessive gains in the rupiah to help exports," said Joanna Tan, a regional economist at Forecast Singapore. [Non-text portions of this message have been removed] ------------------------------------ Post message: [email protected] Subscribe : [email protected] Unsubscribe : [email protected] List owner : [email protected] Homepage : http://proletar.8m.com/Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/proletar/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/proletar/join (Yahoo! ID required) <*> To change settings via email: [email protected] [email protected] <*> To unsubscribe from this group, send an email to: [email protected] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
