Indonesia's Stock Index Gains; Excelcom Climbs in Trading Debut

Indonesia's Stock Index Gains; Excelcom Climbs in Trading Debut

Bloomberg/Jakarta

Jakarta Composite Index rose for the third day in four. Mobile phone operator PT Excelcomindo Pratama jumped after its stock began trading in the nation's biggest initial share sale in two years.

"Indonesia's telecommunication sector is resilient, with low penetration rates providing big potential growth," said Cholis Baidowi, who helps manage the equivalent of US$479 million at PT Trimegah Securities in Jakarta.

The Jakarta Composite jumped 20.41, or 2 percent, to 1048.30 at the 4 p.m. local time close. More than three stocks rose for each one that fell.

Stocks also rose as concerns eased expected protests against government plans to boost fuel prices will result in social unrest. A protest rally in Jakarta on Thursday attracted thousands of people.

Excelcomindo, Indonesia's third-largest mobile-phone operator partly owned by Telekom Malaysia Bhd., surged Rp 300, or 15 percent, to Rp 2.300. The company raised Rp 2.86 trillion ($274 million) by selling a 20 percent stake at Rp 2,000 per share, Director Rudiantara told reporters on Thursday.

Khazanah Nasional Bhd., Malaysia's state-owned investment arm, bought a 16.8 percent stake, while Telekom Malaysia Bhd., has 25 percent, he said.

"The money raised will help Excelcom expand its business and keep its" third ranking in Indonesia's phone market, said Adrian Rusmana Setiamihardja, head of research at PT BNI Securities in Jakarta. "The shares jumped because liquidity is small, with most shares taken up by Khazanah and Telekom."

Mobile-phone users in Indonesia may more than double to about 79 million subscribers by 2007, according to Morgan Stanley. Less than a quarter of the nation's 238 million people have telephone access. Excelcomindo's initial offer was the country's biggest since the government raised Rp 4.17 trillion selling 41 percent of PT Bank Rakyat Indonesia in October 2003.

The benchmark, which closed 0.6 percent higher at the midday break, extended its advance in the afternoon after a rally in Jakarta to protest the government's plan to raise fuel prices proceeded peacefully. The index lost 0.9 percent on Wednesday while the rupiah fell to a three-week low on concerns plans to increase fuel costs would lead to riots amongst the poor.

"Investors were concerned about unrest," said Alvin Pattisahusiwa, who helps manage about $145 million at Fortis Investments in Jakarta. "As the rally went peacefully and the turn up was small" stock buying increased.

The rupiah appreciated 0.8 percent to 10,291 against the dollar at 4:06 p.m., reversing earlier losses.