Stocks climb for 8th day; Telkom gains on S&P rating

Stocks climb for 8th day; Telkom gains on S&P rating

Soraya Permatasari and Arijit Ghosh, Bloomberg/Jakarta

Indonesian stocks rose for an eighth day, the longest winning streak in almost 10 months. PT Telekomunikasi Indonesia (Telkom) climbed to a record after the phone company had its debt ratings raised by Standard & Poor's.

The rating increase means "Telkom can get cheaper rates if it wants to borrow, so reducing its cost of funds," said Arfan Karniody, who holds Telkom shares among the US$150 million he helps manage at PT Niaga Aset Management.

The Jakarta Composite Index added 7.02, or 0.6 percent, to 1182.03 at the 4 p.m. local time close, extending a seven-day, 7.2 percent gain. It's the longest period of gains since the nine days ended Feb. 23.

Telkom climbed Rp 150, or 2.5 percent, to Rp 6,150, the highest since the company started trading on Nov. 14, 1995.

The ratings of Telkom and its mobile-phone unit PT Telekomunikasi Selular (Telkomsel) were raised two levels to BB+, S&P said in a release on Monday. Indonesia is rated B+. All are junk ratings.

"Everything good is happening at Telkom," said Katarina Setiawan, head of research at Kim Eng Securities in Jakarta. "The company plans to buy back shares, S&P has raised its ratings, we have a strong buy on the stock."

Lenders rose after the International Monetary Fund said on Tuesday Indonesia's inflation will slow from a six-year high of 18 percent last month, easing concern the central bank will raise interest rates aggressively.

Inflation is expected to slow to 8 percent by the end of next year, Stephen Schwartz, an IMF representative told reporters in Jakarta.

PT Bank Central Asia, the nation's No. 2 lender, gained Rp 50, or 1.5 percent, to Rp 3,500. PT Bank Rakyat Indonesia, fourth biggest, added Rp 50, or 1.6 percent, to Rp 3,100. PT Bank Danamon, the No. 5 bank, gained Rp 200, or 4.7 percent, to Rp 4,450.

PT Astra International fell for the first day in three after an industry report said vehicle sales dropped 26 percent in November from a year earlier. Astra International fell Rp 300, or 2.8 percent, to Rp 10,300, ending a two-day, 6 percent gain.

Local auto sales dropped to 26,121 units last month from 35,157 units a year ago, PT Toyota Astra Motor, which is majority owned by Astra International, said in a statement, citing figures from the Association of Indonesian Automotive Manufacturers (Gaikindo).

Car sales in Indonesia, Southeast Asia's biggest economy, are forecast to drop by as much as 24 percent next year as high interest rates cut demand, Bambang Trisulo, chairman of Gaikindo, said on Nov. 24. Sales may decline to 400,000 to 500,000 units next year from an estimated 525,000 units this year, he said.