Jakarta stocks gain as fuel concerns ease; Astra paces rise

Jakarta stocks gain as fuel concerns ease; Astra paces rise

Bloomberg, Jakarta

Indonesian stocks rose for the first day in five on Monday after U.S. refineries were spared a direct hit from Hurricane Rita, sending oil prices lower and boosting expectations of growth in Southeast Asia's biggest economy.

PT Astra International led gains on investor hopes the fall in oil prices will allow the government to limit planned cuts in fuel subsidies, boosting consumer spending.

"The market has received a boost in sentiment on the relief in oil prices after Rita's damage was less than feared," said Yudhistia Susanto, who helps manage the equivalent of US$28 million in assets at PT Mandiri Manajemen Investasi in Jakarta.

PT Telekomunikasi Indonesia had its biggest gain in two months after it reached an agreement with rival PT Indosat on access codes for each other's customers.

The Jakarta Composite Index climbed 21.73, or 2.2 percent, to close at 1,034.59. Gaining stocks led decliners 75 to 26. The benchmark fell 4.2 percent last week partly on concern hurricane damage to crucial U.S. refineries would send oil prices higher.

Crude oil for November delivery fell as much as 2.4 percent to $62.65 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Astra, Asia's biggest auto retailer, jumped Rp 300, or 3.3 percent, to Rp 9,350. PT Indofood Sukses Makmur, the world's biggest maker of instant noodles, added Rp 10, or 1.5 percent, to Rp 690, its first gain in 10 days. PT Gudang Garam, Indonesia's biggest cigarette maker, climbed Rp 50, or 0.5 percent, to Rp 10,800.

Lenders such as PT Bank Rakyat Indonesia gained on expectations a drop in oil may help halt the rupiah's slide, reducing pressure on the central bank to raise interest rates.

The rupiah rose 0.1 percent to 10,227 rupiah against the dollar at 4:06 p.m. Jakarta time. It has lost 9.3 percent of its value against the dollar so far this year as rising global oil prices boost the cost of fuel subsidies and imports.

PT Bank Rakyat Indonesia, the fourth-largest lender by assets, rose Rp 100, or 4.2 percent, to Rp 2,500. PT Bank Central Asia, the second-biggest lender, added Rp 50, or 1.5 percent, to Rp 3,425.

"With oil prices falling, there is less pressure on the rupiah" and on government fuel subsidies, said Mardesiana, an analyst at PT Kresna Graha Sekurindo in Jakarta.

Texas refineries, including units of Exxon Mobil Corp. and Valero Energy Corp., probably escaped major damage from Rita, which came ashore a few miles east of the Texas-Louisiana border on Sept. 24. The Houston area accounts for about 12 percent of U.S. refining capacity.

Indonesia plans to raise fuel prices on Oct. 1 to reduce the government's fuel subsidy burden, President Susilo Bambang Yudhoyono said on Sept. 23. The government may boost prices of gasoline, kerosene and diesel by at least 50 percent next month, Vice President Jusuf Kalla said on Sept. 16.

Indonesia, the only member of OPEC that is a net oil importer, is planning to reduce fuel subsidies to cut its budget deficit. Oil has surged 46 percent on global markets this year.

Elsewhere, PT Telekomunikasi Indonesia, the country's biggest telephone company, and PT Indosat, the second-biggest, gained after they agreed to allow their customers to connect with each other's networks.

The agreement enables Indosat's customers to use the '0' access code for domestic long-distance calls previously available only to Telkom's users. In turn, Telkom's subscribers can make international calls using the '001' access code previously available only to Indosat's customers.

"The agreement gives Telkom benefits," said Katarina Setiawan, an analyst at Kim Eng Securities in Jakarta. "Telkom doesn't have to have huge marketing costs" to introduce new access codes to expand services.

Telkom jumped Rp 275, or 5.6 percent, to Rp 5,200, the biggest one-day gain since July 22. Indosat gained Rp 125, or 2.5 percent, to Rp 5,075.