[Kabar-indonesia] JSX Falls 1.1 Percent To Two-Week Low

[Joyo at aol.com]

Bloomberg 
June 28, 2006

Indonesian stocks fall to lowest in two weeks

JAKARTA: Indonesian stocks fell to the lowest in two weeks on concern the 
U.S. Federal Reserve will keep raising interest rates, sapping demand for local 
assets and preventing domestic borrowing costs from declining.

PT Telekomunikasi Indonesia and PT Bank Rakyat Indonesia led declines among 
the country's biggest companies by value.

"The outlook on rising interest rates makes investors more risk averse and is 
causing a sell-off in stocks," said Bambang Setiadi, who helps manage about 
US$214 million at PT Sinar Mas Sekuritas in Jakarta.

The Jakarta Composite Index lost 13.57, or 1.1 percent, to 1,272.05 at the 4 
p.m. local time, its lowest close since June 15. Almost two stocks fell for 
each one that rose.

In the U.S., the Dow Jones Industrial Average suffered its biggest loss in 
three weeks. The Fed will raise the target rate to 5.25 percent on June 29, 
according to all but two of the 127 economists surveyed by Bloomberg News.

Rate increases in the U.S. reduce the attraction of Indonesian assets, 
including shares, and put pressure on the rupiah as investors move into dollar-based 
asset s. The rupiah fell as much as 0.2 percent to 9,365 against the dollar 
Wednesday. It waslittle changed at 9,340 a dollar recently.

Telekomunikasi, or Telkom, the nation's biggest company by value, lost Rp 
100, or 1.4 percent, to Rp 7,050, its lowest since June 15, on concern a weaker 
rupiah will boost costs to pay its $765 million debt in local currency terms.

PT Bank Central Asia, Indonesia's biggest lender by value, fell Rp 75, or 1.9 
percent, to Rp 3,950 on concern the nation's central bank, Bank Indonesia, 
will delay further interest rate cuts if U.S. borrowing costs keep rising. 
Rakyat, the secondlargest, lost Rp 75, or 1.9 percent, to Rp 3,900.

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Joyo Indonesia News Service
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