Indonesian Stocks Rise to Two-Week High: World's Biggest Mover

By Naila Firdausi

March 12 (Bloomberg) -- Indonesia's stocks rose to a two- week high, led by lenders such as PT Bank Mandiri, after Bisnis Indonesia newspaper said the central bank expects loan growth to accelerate this year.

``Banks are still cheap relative to outlooks for lending as interest rates fall,'' said Cholis Baidowi, who helps manage about $262 million at PT Trimegah Securities in Jakarta.

PT Perusahaan Gas Negara advanced after saying one of its gas pipelines connecting Sumatra and Java started operations.

The Jakarta Composite Index added 29.94, or 1.7 percent, to 1794.52. That's the biggest gain among markets included in global benchmarks and the highest close since Feb. 22. More than two stocks rose for each that fell.

Mandiri, Indonesia's largest lender by assets, gained 125 rupiah, or 5.2 percent, to 2,550, its biggest jump since Jan. 15. PT Bank Central Asia, the second-biggest, rose 150 rupiah, or 3 percent, to 5,100. PT Bank Pan Indonesia, the ninth-largest, jumped 30 rupiah, or 5.7 percent, to 560.

Lending growth at Indonesia's 131 commercial banks is forecast to increase 22 percent this year, Bisnis Indonesia said, citing Muliaman Hadad, a deputy governor at Bank Indonesia. Loan growth was 14.1 percent last year, the report said.

Bank Indonesia, which cut its key interest rate on March 6, said inflation may slow this month as rice imports keep food costs in check. Slowing inflation may give policy makers room to cut borrowing costs further, helping spur demand for loans.

An index tracking Indonesia's 67 lenders climbed 2.4 percent today, accounting for almost two-fifths of the Jakarta Composite's advance. That was the biggest gain among the benchmark's nine industry groups.

PT Astra International, Indonesia's largest auto seller, advanced 200 rupiah, or 1.4 percent, to 14,650. Most Indonesians borrow when buying vehicles.

Gas Negara

Gas Negara, Indonesia's largest gas distributor, climbed 150 rupiah, or 1.6 percent, to 9,300. Gas Negara started sending gas through the pipeline connecting South Sumatra and western Java yesterday, President Director Sutikno said by telephone today. The gas, flowing at 30 million cubic feet a day, will reach its first customer by the end of this week, he said.

Gas Negara is building two pipelines to connect gas-rich South Sumatra with Java, where demand is soaring after crude prices reached a record last year. The company's shares tumbled 23 percent on Jan. 12 when it was announced that the completion of the pipeline projects will be delayed for as long as one year.

The company ``is starting to deliver on its revised schedule, which provides welcome relief for investors,'' said Adam Worthington, a Jakarta-based analyst at Macquarie Securities Indonesia. ``This is a step in the right direction toward investors having clarity on 2008 forecasts.''

Exporters Gain

Trade-related stocks got a boost after reports showed Japan's economy expanded at the fastest pace in three years and U.S. unemployment unexpectedly fell.

PT Berlian Laju Tanker, Indonesia's largest shipping company by value, jumped 60 rupiah, or 3.5 percent, to 1,790. PT Bumi Resources, Indonesia's largest coal exporter, added 10 rupiah, or 0.9 percent, to 1,170.

The U.S. unemployment rate fell in February to 4.5 percent from 4.6 percent, approaching a five-year low, the Labor Department said March 9. Hourly wages gained 0.4 percent. Economists in a Bloomberg News survey had estimated a jobless rate of 4.6 percent and earnings growth of 0.3 percent.

Japan, the world's No. 2 economy, said today gross domestic product rose at an annual 5.5 percent pace in the fourth quarter, beating the 5.1 percent forecast by economists.

Japan is Indonesia's largest export market, while the U.S. is the third, after the European Union. Sales to Japan and the U.S. accounted for 29 percent of Indonesia's total non-oil exports in 2006.

`Positive Sentiment'

``Indonesian stocks also rose on positive regional sentiment,'' said Trimegah's Cholis. ``Foreign investors that sold-off Asian stocks are consolidating and are returning.''

Among stocks boosted by the improved sentiment, PT Telekomunikasi Indonesia, the nation's biggest company by value, gained 200 rupiah, or 2.2 percent, to 9,400.

The following stocks also rose or fell in Jakarta. Stock symbols are in parentheses.

PT Astra Agro Lestari (AALI IJ), Indonesia's largest palm- oil producer by market value, gained 250 rupiah, or 2 percent, to 12,500. The price of the edible oil will average $564 a metric ton in 2007, 27 percent higher than last year's figure, according to the median forecast of eight analysts polled by Bloomberg News. The average price gained 11 percent in 2006 compared with the previous year.

PT Bimantara Citra (BMTR IJ), Indonesia's biggest media company, added 75 rupiah, or 1.6 percent, to 4,850, set for its highest close since Feb. 28. Profit last year more than tripled to 446 billion rupiah from 136 billion rupiah, helped by higher sales and increased efficiency.

PT Matahari Putra Prima (MPPA IJ), Indonesia's biggest retailer by sales, rose 20 rupiah, or 2.9 percent, to 710. Profit in 2006 fell 28 percent to 160.5 billion rupiah from 222.66 billion rupiah a year earlier as the company booked higher interest costs and a foreign-currency loss, Matahari said in a statement in Investor Daily Indonesia newspaper. Sales climbed to 8.49 trillion rupiah from 6.92 trillion rupiah.

Excluding the foreign currency loss, ``the result should be above our forecast,'' PT DBS Vickers Securities Indonesia said in a note to clients today.