Stocks climb after BI ups key rates<\/p>\n
Naila Firdausi, Bloomberg\/Jakarta<\/p>\n
Indonesia's key stock index closed at its highest in almost 17
\nweeks after the central bank raised interest rates less than some
\neconomists had expected. PT Bank Rakyat Indonesia (BRI) and PT
\nAstra International paced gains.<\/p>\n
Stocks also advanced after the rupiah climbed to its strongest
\nlevel in almost four months on speculation the appointment of new
\nministers will spur economic growth.<\/p>\n
The Jakarta Composite Index climbed 27.93, or 2.5 percent, to
\n1151.37 at the 4 p.m. local time close, its highest close since
\nAug. 12. The gain, the biggest jump since Sept. 30, was the
\nbiggest fluctuation among indexes included in global benchmarks.
\nAll nine industry groups rose.<\/p>\n
Bank Indonesia on Tuesday raised a key interest rate by half a
\npercentage point to 12.75 percent, less than the 13.25 percent
\nmedian forecast of 10 economists in a Bloomberg survey. The
\nincrease was less than a 1.25 percentage point rise on Nov. 1.<\/p>\n
\"Investors are responding positively to the less-than-
\nexpected increase, which signals the central bank won't be too
\naggressive in raising rates,\" said Winston Sual, who helps manage
\nabout $101 million at Panin Asset Management in Jakarta.<\/p>\n
BRI, Indonesia's fourth-largest lender by assets, added Rp 75,
\nor 2.6 percent, to Rp 3,000. Astra, the nation's biggest auto
\ndistributor that sells most of its cars and motorcycles through
\nloans, climbed Rp 350, or 3.6 percent, to Rp 10,000, the highest
\nclose since Sept. 19.<\/p>\n
PT Bank Mandiri, the country's largest lender, jumped Rp 90,
\nor 6.4 percent, to Rp 1,490, the biggest advance since Aug. 30.
\nCredit Suisse First Boston analyst Roger Lum raised the stock to
\n\"outperform\" from \"neutral\".<\/p>\n
The rupiah gained as investors bet new ministers will
\nintroduce policies to control inflation and boost investment.
\nPresident Susilo Bambang Yudhoyono on Wednesday swore in former
\nminister of finance Boediono as chief economics minister while
\nstate minister of national development planning Sri Mulyani
\nIndrawati moved to the finance portfolio.<\/p>\n
The rupiah rose to as high as 9,823 a dollar, its strongest
\nsince Aug. 12. It was at 9,826 a dollar at 4:18 p.m. The currency
\nhas gained 2 percent against the dollar while the Jakarta
\nComposite has climbed 5 percent since Susilo flagged the planned
\nchanges to his cabinet on Dec. 2.<\/p>\n
\"Investors are optimistic the new economic team can deliver on
\ntheir low inflation promise,\" said Raymond Gin, who helps manage
\nthe equivalent of US$800 million at PT Manulife Aset Manajemen
\nIndonesia in Jakarta. \"The large and liquid stocks are the best
\nto invest in as they are interest rate-sensitive.\"<\/p>\n
PT Telekomunikasi Indonesia (Telkom), the nation's biggest
\ntelephone company, gained Rp 200, or 3.6 percent, to Rp 5,800,
\nthe highest close since July 22, on expectations a stronger
\nrupiah will cut the cost of servicing foreign debt. The company
\nhas about $850 million in dollar debt.<\/p>\n
PT Indofood Sukses Makmur, the world's biggest maker of
\ninstant noodles, increased Rp 60, or 6.7 percent, to Rp 950, its
\nbiggest gain since a 7.6 percent jump on Sept. 9. A stronger
\nlocal currency will reduce the cost of importing ingredients such
\nas wheat.<\/p>\n
\"Investors see the new cabinet as committed to curbing
\ninflation,\" said Budi Budar, who helps manage about $91 million
\nin assets at PT NISP Sekuritas in Jakarta. \"That helps the rupiah
\nand improves corporate earning outlooks.\"<\/p>\n
More than 2 billion shares worth Rp 1.67 trillion ($170
\nmillion) changed hands on Wednesday, almost double the three-
\nmonth daily average trading value of Rp 850 billion.<\/p>",
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