Indonesia Stocks Gain Most in Two Months After Moody’s Review

Indonesia stocks gained, with the benchmark index rising the most in more than two months, after Moody’s Investors Service placed the nation’s sovereign debt rating on review for possible upgrade.

PT Bank Central Asia, Indonesia’s biggest bank by market value, rose 5.8 percent after Moody’s placed 10 banks on review for possible upgrade. PT Bumi Resources, the nation’s largest coal producer, jumped 7.6 percent on speculation recent falls were excessive.

The Jakarta Composite index rose 2.5 percent to 3,619.09 at the 4 p.m. local-time close, recovering from a 2.7 percent drop yesterday. Today’s gain was the biggest since Sept. 15.

“People expect Indonesia will make it to investment grade within a year, so any development in that direction will be well received by the market,” said Lanang Trihardian, an analyst at Jakarta-based PT Syailendra Capital, which manages about $221 million in assets. “Overseas investors who have been holding back may enter Indonesia once it gains investment grade.”

Moody’s placed the Southeast Asian nation’s debt on review for a possible upgrade as “Indonesia’s economic resilience is accompanied by sustained macroeconomic balance,” it said today. The company has a Ba2 grade on Indonesia’s local- and foreign- currency debt after its last upgrade of the country to two levels below investment grade in September 2009.

Bank Central Asia rose 5.8 percent to 6,400 rupiah and PT Bank Mandiri, Indonesia’s largest bank by assets, rose 4.7 percent to 6,700 rupiah after Moody’s placed the ratings of 10 Indonesian banks on review for possible upgrade.

Bumi rose 7.6 percent to 2,850 rupiah, recovering from an 11 percent drop yesterday. Considering the plunge, a rebound in Bumi shares is “to be expected,” Syailendra’s Trihardian said.

PT Medco Energi Internasional, Indonesia’s biggest listed oil producer, declined 3.7 percent to 3,225 rupiah, the lowest close since Sept. 28. PT Pertamina said it dropped a plan to buy a stake in Medco’s controlling shareholder after a deadline for an agreement expired yesterday.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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