Indonesian Stocks Drop to One-Year Low as Commodity Prices Fall

By Berni Moestafa

Aug. 11 (Bloomberg) -- Indonesian stocks fell to the lowest in almost a year, led by commodity producers, after oil and metal prices dropped on concern slower economic growth will hurt demand.

PT Bumi Resources, Asia's largest thermal-coal exporter, declined to its lowest in more than four months after crude oil slid more than $4 a barrel in New York on Aug. 8, reducing the allure of alternative energy sources. PT Timah, the world's second-biggest tin miner, had its biggest drop in almost seven months.

The Jakarta Composite index slipped 62.01, or 2.8 percent, to close at 2,133.92, its lowest since Aug. 23. More than six stocks fell for each that rose on the benchmark gauge, which has slumped 22 percent this year.

``The ease with which oil dropped $4 on Friday has made people worry that it can decline even further,'' said Winston Sual a director at Jakarta-based PT Panin Sekuritas, which manages about $272 million in assets. Commodity shares ``may not have bottomed out.''

Bumi lost 8.9 percent to 5,150 rupiah, closing at its lowest since April 3. PT Adaro Energy, Indonesia's second-biggest coal miner, slid 3.8 percent to 1,540 rupiah. Oil futures in New York gained 0.7 percent to $116.03 a barrel in after-hours trading, having slumped 4 percent on Aug. 8.

Timah, the world's second-biggest tin miner, plunged 13 percent to 2,600 rupiah, its steepest slide since Jan. 22 after tin for three-month delivery declined 7.2 percent to $19,000 a ton in London on Aug. 8.

The Reuters/Jefferies CRB index of 19 raw materials, including oil and metals, fell on Aug. 8 to a four-month low.

PT Bakrie Sumatera Plantations, Indonesia's third-largest publicly traded plantation company, retreated 8.9 percent to 1,120 rupiah. Palm oil in Kuala Lumpur dropped 3.9 percent to 2,671 ringgit ($806) a metric ton, extending the 2.3 percent slide on Aug. 8.

PT Indofood Sukses Makmur, Indonesia's biggest instant- noodle maker, declined 3.6 percent to 2,000 rupiah, the biggest drop since July 3. Indofood's wheat flour production may decline 10 percent this year on lower demand, Franciscus Welirang, a director at the company said in an Aug. 8 interview.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net