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.