Stocks advance, paced by Telkom, Astra on rupiah

Stocks advance, paced by Telkom, Astra on rupiah

Bloomberg/Jakarta

Indonesian stocks rose, paced by PT Telekomunikasi Indonesia and PT Astra International, after the rupiah gained for the first day in three, easing concern the cost of imports and servicing dollar-denominated debt will escalate.

"The stronger rupiah really lifts sentiment on the market," said Christine Salim, head of research at PT Samuel Securities in Jakarta. "It also eases pressure that interest rates will rise."

The Jakarta Composite Index rose for a second day, adding 12.9, or 1.2 percent, to 1123.46 at the 4 p.m. local time close. Almost two stocks gained for each one that fell.

The rupiah climbed 0.4 percent to Rp 9,763 against the dollar at 3:59 p.m. Jakarta time. It rose to Rp 9,721 a dollar earlier, the highest since June 30. A stronger currency reduces the cost of importing components and machinery and makes repayments on foreign-currency debt cheaper.

Telekomunikasi, the nation's biggest telephone company, climbed 25 rupiah, or 0.5 percent, to 4,975. Telkom has about $750 million in dollar-debt and imports most of its equipment. PT Indocement Tunggal Prakarsa, which has about $495 million in debt as of December, gained 100 rupiah, or 2.9 percent, to 3,550.

Astra, the country's biggest automobile distributor, rose 250 rupiah, or 2.1 percent, to 12,450. The shares plunged 6.2 percent last week. Astra imports about half of its components.

PT Bank Mandiri, the biggest lender by assets, gained Rp 20, or 1.4 percent, to Rp 1,500. PT Bank Lippo, the ninth- largest lender, jumped 120 rupiah, or 10 percent, to 1,320.

The benchmark, up 0.4 percent at the midday break, extended gains after the government said it plans to build a new oil refinery plant in Java, potentially reducing the nation's fuel bill.

"The index fell last week on budget deficit concerns because high oil prices swell" government fuel subsidies, said Suherman Santikno, head of research at PT IndoPremier Securities. "Higher investment in the energy sector will boost oil output and cut our imports and help budget." Indonesia imports a third of its fuel products.

The following stocks also rose or fell. Stock symbols are in parentheses after company names.

PT Bakrie & Brothers (BNBR IJ), a company with interests ranging from property to telecommunications, jumped Rp 15, or 12.5 percent, to 130. The stock, which is trading at 0.82 times its sales and 0.6 times its book value, "is attractively priced," said Edwin Sinaga, senior sales manager for PT Kuo Capital Raharja in Jakarta. "There is also expectation the company will win some infrastructure projects."

The Jakarta Composite Index is trading at 1.3 time sales and 2.3 time book value, according to Bloomberg data. Kuo was the second-biggest net buyer of Bakrie shares today.

PT Indosat (ISAT IJ), Indonesia's second-biggest telephone company, added Rp 150, or 2.8 percent, to 5,450 on expectations the company will report improved earnings in the second quarter. Deutsche Bank AG estimates the company added 2.7 million new subscribers in the three months ended June 30, compared with 435,000 users in the first quarter.

"We expect that the performance in the second quarter of 2005 will improve as capacity constraints go and network quality improves," Deutsche Bank analyst Raymond Kosasih wrote in a note to clients dated today. "We estimate second-quarter mobile revenue of 2.3 trillion rupiah, up 39 percent on year,"

PT Ramayana Lestari Sentosa (RALS IJ), the nation's biggest retailer by value, slid Rp 20, or 2.3 percent, to 870. Investors who buy the shares today are no longer entitled to a Rp 30 a share dividend the company will pay on July 27.

PT Tambang Batubara Bukit Asam (PTBA IJ), a state-controlled Indonesian coal miner, gained 30 rupiah, or 2 percent, to 1,530. The company is considering buying three coalminers in Kalimantan, Bisnis Indonesia reported, citing company President Ismet Harmaini.