Stocks climb for 5th day; Danamon, Antam advance

Stocks climb for 5th day; Danamon, Antam advance

Naila Firdausi, Bloomberg/Jakarta

Indonesian stocks advanced for a fifth day, the longest winning stretch in six weeks. PT Bank Danamon and PT Astra International rose after the central bank said it will try to avoid "substantial" interest rate increases.

PT International Nickel Indonesia and PT Aneka Tambang gained after nickel prices climbed to a one-month high.

The Jakarta Composite Index added 7.47, or 0.7 percent, to 1062.46 at the 4 p.m. local time close, extending a four-day, 3.7 percent advance. The five-day winning streak matched a period ended Oct. 5. Rising stocks led decliners 57 to 47 today.

Burhanuddin Abdullah, governor of Bank Indonesia, said on Monday the central bank will try to avoid a "substantial" rate increase, even with inflationary pressures, because it doesn't want to hurt economic growth.

"Investors are betting interest rates will not be raised as much as was expected and that provides positive sentiment for stocks, especially banks," said Bambang Setiadi, who helps manage the equivalent of US$150 million at PT Sinar Mas Sekuritas.

Danamon, Indonesia's fifth-largest lender by assets, gained Rp 175, or 4.8 percent, to Rp 3,825 as concern of higher costs to pay depositors and of slowing demand for loans eased. PT Bank Mandiri, the largest, added Rp 10, 0.9 percent, to Rp 1,190.

Astra, Indonesia's largest auto retailer that sells most of its cars and motorcycles through loans, rose Rp 100, or 1.1 percent, to Rp 9,150.

Stocks also rose after Indonesia's economic growth slowed less than some economists had estimated in the third quarter. The economy grew 5.3 percent in the three months ended Sept. 30, the slowest in a year, as rising fuel costs, higher inflation and interest rates curbed consumer spending. Still, the pace of growth beat a 5.1 percent median forecast in a Bloomberg survey of 12 economists.

Government spending increased 16.2 percent in the three months ended September from a year ago. Investment grew 9.2 percent and household consumption rose 4.4 percent.

"We had expected the growth would slow; I think the rate came out good," said Prayoga Triyono, head analyst at PT Henan Putihrai in Jakarta.

PT Telekomunikasi Indonesia, the country's biggest telephone company, gained Rp 50, or 1 percent, to Rp 5,200.

Nickel for delivery in three months on the London Metal Exchange jumped 3.4 percent to $12,350 a metric ton on Nov. 18, the highest close since Oct. 18. PT Aneka Tambang, a nickel and gold miner 65 percent owned by the Indonesian government, gained Rp 75, or 3.1 percent, to Rp 2,500. PT International Nickel Indonesia, the local unit of Canada's Inco Ltd., jumped Rp 600, or 4.8 percent, to Rp 13,000.

"The view is that the nickel price is unlikely to fall again as demand seems to continue growing," said Suherman Santikno, head of research at PT Indo Premier Securities in Jakarta. "With the outlook of higher metal prices, Aneka and International Nickel are very attractively valued."

PT Indocement Tunggal Prakarsa, Indonesia's second-largest cement maker by sales, advanced Rp 75, or 2.4 percent, to Rp 3,175. The company may post a lower foreign currency loss this year, mainly due to a $150 million hedging arrangement, Bisnis Indonesia newspaper said, citing Director Christian Kartawijaya. Indocement had a Rp 498 billion currency loss last year, according to a previously published report.