Stocks gain as rupiah strengthens, Telkom rises

Stocks gain as rupiah strengthens, Telkom rises

Bloomberg, Jakarta

Indonesia's key stock index had its biggest advance in two months
amid optimism costs of servicing debt and importing goods will
fall after the rupiah rose to a five-week high against the
dollar.

Companies that rely on imported materials, such as PT
Telekomunikasi Indonesia and PT Astra International, led gains.
The Jakarta Composite Index rose 18.70, or 1.8 percent, to
1068.28 at the 4 p.m. local time close, the biggest jump since
March 1. The index surged 3.8 percent this week, its first weekly
gain in four.

Standard & Poor's said on Thursday it would not cut
Indonesia's credit rating, helping to boost the currency. The
rupiah added 0.3 percent to 9,483 against the dollar at 3:47 p.m.
It earlier climbed to 9,460 per dollar, the highest since April
1. The market was closed for a holiday Thursday.

"A stronger rupiah makes stocks look more attractive," said
Denny Lesmana, who helps manage the equivalent of $26.4 million
in assets at PT Platinum Asset Management in Jakarta, including
shares of Telkom and Astra. "Economic fundamentals are still
strong. We have a positive outlook on stocks."

Indonesia's economy is forecast by the government to expand
5.5 percent this year, after growing 5.1 percent in 2004.

S&P in December lifted the nation's long-term foreign-currency
rating one level to B+ and Moody's Investors Service upgraded the
outlook of the nation's credit rating to "positive" from "stable"
in March.

Telkom, the country's biggest telephone company, jumped Rp
200, or 4.7 percent, to Rp 4,500, its biggest gain since Nov. 22.
Telkom, which has about $750 million in debt, imports most of its
equipment while earning revenue in rupiah.

Astra, the country's biggest automobile distributor, added Rp
100, or 0.9 percent, to Rp 10,850. Astra imports more than 50
percent of components of cars and motorcycles.

PT Kalbe Farma, Indonesia's biggest drugmaker by sales, surged
Rp 30, or 4.1 percent, to Rp 760. Smaller rival PT Dankos
Laboratories added Rp 10, or 1 percent, to Rp 1,000. Indonesian
drugmakers import about 90 percent of their chemicals.

About 1.13 billion shares worth Rp 1.31 trillion ($138
million) changed hands on Friday, 34 percent less than the six-
month daily average trading volume of 1.72 billion shares.

PT Medco Energi Internasional, the country's biggest publicly
traded oil company by value, gained Rp 150, or 5.5 percent, to Rp
2,875. Smaller rival PT Energi Mega Persada jumped Rp 50, or 7.8
percent, to Rp 690.

PT Bank Internasional Indonesia, the country's sixth-largest
lender by assets, added Rp 15, or 8.8 percent, to Rp 185. The
lender said on May 4 it sold $150 million of bonds to boost
capital and expand.

BII, partly owned by South Korea's biggest lender, Kookmin
Bank, also said it received the central's bank approval to buy
financing company PT Wahana Ottomitra Multiartha to boost its
network and expand consumer loans.