Stocks rise on reports of Cabinet reshuffle

Stocks rise on reports of Cabinet reshuffle

Naila Firdausi and Arijit Ghosh, Bloomberg/Jakarta

Indonesia's key stock index surged to a 16-week high on reports
that President Susilo Bambang Yudhoyono may name former Minister
of Finance Boediono to his economic team. PT Telekomunikasi
Indonesia (Telkom) rose.

Stock gains were "about the cabinet reshuffle and about
Boediono being named a minister," said Cholis Baidowi, who helps
manage the equivalent of US$1.2 billion at PT Trimegah Securities
in Jakarta. "If Boediono comes back it will help improve
coordination among ministers."

The Jakarta Composite Index climbed 23, or 2.1 percent, to
1119.41 at the 4 p.m. local time close, the highest since Aug.
12. Gaining stocks led decliners 97 to 20.

The measure had the biggest fluctuation among equity markets
included in global benchmarks. It rose 4.2 percent this week, its
biggest weekly gain since the period ended Sept. 30.

Telkom, Indonesia's biggest company, led gains. The shares
rose Rp 100, or 1.8 percent, to Rp 5,550. PT Astra International,
the nation's biggest car retailer, added Rp 300, or 3.2 percent,
to Rp 9,550. PT Bank Mandiri, the biggest lender by assets,
surged Rp 70, or 5.3 percent, to Rp 1,380.

Susilo said he plans to reshuffle his cabinet in the next two
to three days as his administration looks for ways to boost
economic growth.

"Boediono is seen by markets as a very solid technocrat and
one that would continue to maintain policy settings," Ong Sin
Beng, an economist at JPMorgan Chase & Co. in Singapore, said in
a note to investors. "This is seen to be a positive move and
could reinforce the constructive view on Indonesia."

Stocks also rose after the government said it expected the
rupiah to strengthen, raising expectations a stronger currency
will help cut costs at companies that import components and have
dollar-denominated debt.

"A stronger rupiah will benefit Indonesian companies as it
will cut costs," said Prayoga Triyono, head analyst at PT Henan
Putihrai in Jakarta.

The rupiah may range between 9,600 and 9,800 against the
dollar within six to 12 months, Minister of Trade Mari Pangestu
said in a telephone interview. The currency, which has fallen 7.3
percent this year, was at Rp 10,003 a dollar at 3:58 p.m. local
time.

PT Bumi Resources, Indonesia's biggest coal exporter, climbed
Rp 20, or 2.9 percent, to Rp 710. The company will sell 45
million metric tons of coal this year, 25 percent more than last
year's sales of 36 million tons, the Tex Report said, citing the
company. About 44 million tons have been sold at an average
prices of $39.50 a ton, 27 percent more than the year-ago prices,
Tex said.

PT Timah, the world's largest tin miner and refiner, rose Rp
50, or 2.9 percent, to Rp 1,780. Tin for delivery in three months
on the London Metal Exchange jumped 5.5 percent on Thursday to
$6,490 a ton, the highest close since Oct. 17.