Stocks rise as rupiah strengthens for 4th day
Stocks rise as rupiah strengthens for 4th day
Bloomberg, Jakarta
Indonesia's stock index rose for a fourth day. PT Telekomunikasi Indonesia (Telkom) led the climb after the rupiah had its biggest gain in three weeks, signaling investors are confident moves to cut fuel subsidies will boost the economy.
"It's a positive move by the government," said Alvin Pattisahusiwa, who helps manage about US$195 million at Fortis Investments Indonesia in Jakarta.
"It will create budget sustainability and macroeconomic stability."
The Jakarta Composite Index climbed 17.75, or 1.6 percent, to close at 1,101.17, the first time the benchmark finished above 1,100 since Sept. 12.
Gaining stocks led decliners 96 to 35.
The rupiah rose 1.1 percent to 10,191 against the dollar, the biggest gain since Sept. 12.
The currency tumbled on Aug. 30 to a more than four-year low on concern the rising cost of importing oil and subsidizing fuel would cause an economic crisis. Last week, the rupiah completed its fourth quarter of losses.
Indonesia on Oct. 1 almost tripled kerosene prices and doubled diesel tariffs in a bid to stop rising subsidies draining the nation's coffers. Gasoline prices were increased by 88 percent. The fuel price rise will allow the government to keep its budget deficit at Rp 24.9 trillion (US$2.4 billion), or about 0.9 percent of gross domestic product.
Fuel subsidies for this year, which have now been capped at Rp 89.2 trillion, would have cost the government Rp 138.6 trillion in 2005 if retail energy prices were not allowed to rise, President Susilo Bambang Yudhoyono said earlier.
Telkom, the nation's biggest telephone company, added Rp 100, or 1.9 percent, to Rp 5,400. PT Indosat, the second-biggest, climbed Rp 100, or 1.8 percent, to Rp 5,550.
PT Indocement Tunggal Prakarsa, Indonesia's second-biggest cement maker by sales volume, jumped Rp 225, or 7.8 percent, to Rp 3,125 on optimism the government will have more to spend on roads and other projects as it cuts subsidies.
Fund managers abroad on Monday bought a net Rp 176 billion of Indonesian shares, shrugging off concern the Oct. 1 bomb attack on the resort island of Bali, that killed at least 22 people, would disrupt the economy.
Indonesia's economy is expected to grow at an average annual pace of 6.6 percent over the next five years, State Minister of National Development Planning Sri Mulyani Indrawati said on Oct. 2. The economy expanded 5.1 percent last year, the fastest pace in eight years.
PT Perusahaan Gas Negara (PGN) surged to a record after the company said it plans to raise prices for industrial users. PGN, a state-controlled gas distributor, jumped Rp 600, or 13 percent, to Rp 5,400. The company said it plans to raise gas prices on Oct. 15 and next year.
PT Tambang Batubara Bukit Asam, a coal miner, rose Rp 70, or 4.3 percent, to Rp 1,700 as investors bet higher fuel prices will lead more companies to seek alternative energy sources.