Stock index has biggest gain in Oct.; Astra shares rises

Stock index has biggest gain in Oct.; Astra shares rises

Arijit Ghosh and Naila Firdausi, Bloomberg/Jakarta

Indonesia's key stock index had its biggest gain this month, led by PT Astra International, the nation's biggest auto retailer, after the company reported a less-than-expected decline in car sales.

"Astra has been underweight for a while," said Kennyarso Soejatman, who helps manage about US$61 million at First State Investments in Jakarta. "We are back to market weight."

The Jakarta Composite Index gained 7.45, or 0.7 percent, to 1033.28 at the 4 p.m. close, its biggest gain since Oct. 31. The measure earlier fell as much as 0.2 percent.

Astra added Rp 250, or 3 percent, to Rp 8,700, its biggest gain in more than a month. The company said it sold 19,723 units locally last month, down 15.6 percent from a year earlier.

"We were expecting Astra's October sales to decline to the 15,000 level, which would have been in line with the overall market," Robert Adair, an analyst with CIMB-GK Research Pte, said in a note to investors. The 15 percent decline "was better than expected."

Elsewhere, PT Semen Gresik, the biggest cement maker, and PT Indocement Tunggal Prakarsa rose after Investor Daily Indonesia said construction of two toll-roads in Jakarta and neighboring cities will start next year, boosting demand for cement.

Semen Gresik added Rp 650, or 3.5 percent, to Rp 19,150. PT Indocement Tunggal advanced Rp 100, or 3.4 percent, to Rp 3,050. The first project includes building a toll road that will connect the Cinere area in south Jakarta and three neighboring cities, the newspaper reported, citing Hisnu Pawenang, head of the Indonesian toll-road regulator.

PT Bank Mandiri, the nation's largest lender by assets, rose Rp 30, or 2.7 percent, to Rp 1,140 as investors bet recent declines were excessive. The stock's 14-day relative strength measure, derived by averaging out daily gains and losses, had a reading of 16.4 on Wednesday, lower than 30, which indicates to some investors that the stock is poised to gain.

PT Medco Energi Internasional, the country's biggest publicly traded oil company, added Rp 25, or 0.8 percent, to Rp 3,125. Crude oil for December delivery rose 1.6 percent to $57.88 a barrel on Wednesday in New York, rebounding from the lowest in four months as the U.S. government reported an unexpected decline in supplies. The contract was recently at $57.78 in after-hours electronic trading.

PT International Nickel, the Indonesian unit of the world's second largest nickel miner, gained Rp 350, or 2 percent, to Rp 11,850. "The stock has fallen 25 percent since October and has breached our 12,000 target price," Michael Chambers, head of Indonesian research at CLSA Asia-Pacific Markets, wrote in a note to investors on Thursday. "It now looks well priced."

PT Mustika Ratu, a cosmetics maker, fell Rp 15, or 5.5 percent, to Rp 260. The company may miss its sales target of Rp 350 billion (US$34.9 million) this year as competition increases and consumer demand declines after the government raised retail fuel prices in March and October, Bisnis Indonesia newspaper reported, citing President Director Mooryati Soedibyo.