Stock index gains; PGN, Cibinong up

Stock index gains; PGN, Cibinong up

Naila Firdausi, Bloomberg/Jakarta

Indonesia's key stock index rose to a 17-week high. PT Semen Cibinong had its biggest gain in 11 months as the rupiah climbed on expectations new economic ministers will be able to spur growth and rein in inflation.

"There is optimism that the new people in office will be capable and do well," said Kennyarso Soejatman, who helps manage about US$55 million at First State Investments in Jakarta.

PT Perusahaan Gas Negara (PGN) rose after saying it is seeking to raise $305 million to expand its gas distribution network.

The Jakarta Composite Index climbed 6.95, or 0.6 percent, to 1,158.32 at the 4 p.m. local time, the highest close since Aug. 11. Declining stocks led gainers 69 to 55.

The measure has gained 5.7 percent since President Susilo Bambang Yudhoyono on Dec. 2 flagged a plan to change his cabinet.

The rupiah rose to as high as 9,770 against the dollar on Thursday, the strongest since Aug. 11. It was at 9,776 a dollar at 4:06 p.m. local time. A stronger local currency cuts the cost of servicing foreign debt and importing materials.

Susilo on Wednesday swore in former finance minister Boediono as his top economics minister. Boediono said the country must boost efforts to prevent a decline in the rupiah and stem a surge in inflation. Planning minister Sri Mulyani Indrawati moved to the finance portfolio.

"People are betting that the worst is behind us," said First State's Soejatman. "Interest rates and inflation are peaking. The new cabinet is the catalyst."

Bank Indonesia on Dec. 6 raised a key interest rate by half a percentage point to 12.75 percent, less than the 13.25 percent median forecast of 10 economists in a Bloomberg survey.

Cibinong, Indonesia's No. 3 cement maker by sales with $487 million in long-term debt, jumped Rp 45, or 9.6 percent, to Rp 515, its biggest gain since a 9.8 percent surge on Jan. 4. PT Kalbe Farma, the biggest drugmaker by sales that imports most of its raw materials, added Rp 10, or 1.1 percent, to Rp 920.

PT Bank Rakyat Indonesia, the fourth-largest lender by assets, rose Rp 75, or 2.5 percent, to Rp 3,075 as investors bet a stronger rupiah will ease pressure on the central bank to raise interest rates.

PT Bank Mandiri, the largest lender, jumped Rp 120, or 8.1 percent, to Rp 1,610. Credit Suisse First Boston on Wednesday raised the stock to "outperform" from "neutral," citing an improving outlook. Merrill Lynch & Co. on Wednesday raised the stock to "buy" from "sell."

PT Bank Danamon, Indonesia's fifth-largest lender, lost Rp 50, or 1.2 percent, to Rp 4,250 as some investors judged recent gains had outstripped performance. The stock gained 7.5 percent in the previous two sessions.

"Stocks prices have gone up significantly," said Adrian Rusmana, head of research at PT BNI Securities in Jakarta.

PT Bumi Resources, the nation's biggest coal exporter, added Rp 20, or 2.7 percent, to Rp 760.

PT Energi Mega Persada, Indonesia's second-biggest publicly traded oil company, slipped Rp 30, or 4 percent, to Rp 720. Crude oil for January delivery on the New York Mercantile Exchange on Wednesday fell for the first day in six, sliding 1.2 percent to $59.21 a barrel.

PT Medco Energi Internasional, the country's biggest publicly traded oil company, gained Rp 75, or 2.2 percent, to Rp 3,525.

PT Perusahaan Gas Negara, the biggest gas distributor, advanced Rp 200, or 2.9 percent, to Rp 7,000. The company may borrow from lenders or sell debt to raise $225 million, President Director Washington M.P. Simandjuntak said on Wednesday.