Indonesian stocks advanced, with the benchmark index rising above 4,000 for the first time, amid speculation the central bank will refrain from raising borrowing costs next week.
PT Bank Mandiri, the nation’s biggest lender by assets, rose to a record and PT Astra International, the largest automotive retailer, climbed 3 percent, leading gains among banks and consumer stocks. Bank Indonesia will keep its interest rate near a record low of 6.75 percent when it meets July 12, according to 12 economists in a Bloomberg News survey.
“There’s no indication for rates to rise again,” said Roy Himawan, who helps manage $352 million in assets at PT Syailendra Capital in Jakarta. “Indonesia has become a favorite among investors with consumers, banks and commodity stocks being the most attractive choices.”
The Jakarta Composite index (JCI) rose 1.6 percent to 4,003.69 as of the 4 p.m. local-time close, the biggest gain in Asia today. The measure has risen 8.1 percent this year, the second-best performer in Asia after Mongolia. Overseas investors bought a net 18.7 trillion rupiah ($2.2 billion) of shares this year through July 7, compared with 8.16 trillion rupiah in the same period a year earlier, according to data compiled by Bloomberg News.
The government reported on July 1 that inflation slowed for a fifth straight month in June to 5.54 percent, widening the scope for the central bank to keep interest rates unchanged after raising it in February. Indonesia’s economy, Southeast Asia’s biggest, may expand faster than forecast at 6.6 percent this year, Bank Indonesia said July 4.
The MSCI Emerging Market Index has gained 1.6 percent this year, less than the MSCI World Index’s 5.5 percent climb, as developing nations took steps to curb rising consumer prices. China increased borrowing costs yesterday for the third time this year, while India has lifted interest rates 10 times since the start of 2010.
Bank Mandiri advanced 3.4 percent to 7,600 rupiah and PT Bank Central Asia, the largest by market value, gained 3.2 percent to 8,050 rupiah. Both stocks closed at a record. PT Bank Rakyat Indonesia, the largest bank by revenue, climbed 2.3 percent to 6,800 rupiah.
Astra, which sells Toyota Motor Corp. vehicles, gained 3 percent to 67,800 rupiah, the biggest boost to the composite index. Indonesia’s domestic vehicle sales in the first six months of 2011 rose 12 percent from a year earlier to 415,276 units, the company’s PT Toyota-Astra Motor unit said July 4. PT Gudang Garam, Indonesian cigarette producer, advanced 3.6 percent to 51,000 rupiah.
Metal producers gained after tin futures rose to a one- month high in London today and nickel rose for a fifth straight day. PT Timah, Indonesia’s largest tin producer, jumped 3.9 percent to 2,675 rupiah, the highest close since May 20. PT International Nickel Indonesia, the nation’s biggest producer of the metal, gained 1.7 percent to 4,475 rupiah, the biggest increase since May 26.
PT Tifa Finance, which provides leasing and consumer loans, surged 55 percent to 310 rupiah in its trading debut. The company raised 55.6 billion rupiah in an initial public offering to expand its leasing business.
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