May 20 (Bloomberg) -- PT Telekomunikasi Indonesia, the nation’s biggest phone operator, rose to a five-year high in Jakarta stock trading as Credit Suisse Group AG said it expects the company to post “double-digit” profit growth in 2013.
Telkom Indonesia, as the company is known, gained 5.4 percent at 2:34 p.m. local time, poised to close at the highest level since October 2007. The stock provided the biggest boost to the benchmark Jakarta Composite Index, which surged 1.7 percent to a record, based on data compiled by Bloomberg dating back to April 1983.
Telkom “looks set to deliver double-digit revenue growth” in the 2013 financial year, Colin McCallum, analyst at Credit Suisse, said in a report today. The “growth trajectory of the fixed-line division is also finally improving,” he wrote. McCallum kept his price target for the stock at 13,000 rupiah and maintained his outperform rating.
Telkom’s rally pushed the stock’s 14-day relative strength index to 70. A reading beyond 70 suggests to some investors that shares are poised to fall. The RSI for the Jakarta Composite climbed to 71.
The Jakarta Composite has rallied 21 percent this year, compared with a 0.4 percent decline in the MSCI Emerging Markets Index. The Jakarta gauge trades at 15.9 times 12-month projected earnings, the highest level since January 2008, data compiled by Bloomberg show.
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