Bloomberg Philippine, Indonesia Stocks Slump on Egypt, Inflation Concerns

Philippine and Indonesian stocks fell, dragging benchmark indexes to the biggest monthly declines since 2008, as Egypt’s political turmoil and inflation concerns caused investors to sell emerging-market equities.

Ayala Corp., owner of the Philippines’ biggest property builder, sank 5.3 percent, while SM Investments Corp., owner of the nation’s largest bank, declined 3.9 percent after government data showed the economy grew faster than economists estimated in the fourth quarter. PT Multistrada Arah Sarana, an Indonesian tire producer that gets about 14 percent of its sales from the Middle East, fell 1.8 percent.

The Philippine benchmark index has lost 12 percent from its record high on Nov. 4 on speculation that rising food prices, oil costs and transport fares may boost domestic inflation risks. The Jakarta Composite Index has fallen 10 percent from its high on Dec. 9. 

Indonesian Banks 
Multistrada fell 1.8 percent to 280 rupiah. PT Bank Rakyat Indonesia, the nation’s second-biggest lender by assets, fell 4.9 percent to 4,850 rupiah and PT Bank Central Asia, the largest by market value, declined 2.6 percent to 5,650 rupiah. A gauge of financial shares retreated 2.7 percent, the biggest drag on the composite index today.

Banks dropped amid concern January inflation may be higher than expected, said Muhamad Sugiarto, an analyst at PT Lautandhana Securindo in Jakarta. Consumer prices rose 6.81 percent in January after having increased 6.96 percent last month, according to economists in a Bloomberg survey before official data due tomorrow.

Bank Indonesia will keep its benchmark reference rate at a record-low of 6.50 percent when it meets Feb. 4, according to 13 of 19 economists in a Bloomberg survey. “It is difficult to sidestep what is going on in Egypt,” said Vishnu Varathan, a Singapore-based economist at Capital Economics (Asia) Pte. “I don’t see investors taking risk exposure in this situation. There is also worry from the policy rate announcement this week.”

To contact the reporters on this story: Ian C. Sayson in Manila