Jakarta – The Jakarta stock exchange's main index rose 5.4 percent on Thursday as the rupiah gained against the dollar, showing signs of life following a heavy battering for most of the week.
The Composite Index added 60.24 points to close at 1,173.86, in what Bloomberg said was the steepest daily increase since Oct. 14. However, the index is still down by 57 percent from January levels.
The rise was also in line with regional trends, with interest rate cuts in major economies lifting market confidence previously gripped by fears of a global economic recession.
Among the gainers were Bank Mandiri and Bank Danamon, the largest and fourth largest lenders by assets. Mandiri shares advanced 9.2 percent to close at Rp 1,300, while Danamon's jumped 10 percent to Rp 2,200.
Bank Central Asia (BCA) shares climbed Rp 200, or 9.1 percent, to Rp 2,400. Mandiri and BCA have reported promising third quarter financial reports, with the former booking 24.4 percent growth in nine-month net profits from a year earlier, and the latter 19 percent.
Shares in state coal miner PT Tambang Batubara Bukit Asam (PTBA) also enjoyed a hefty rise, climbing 9.6 percent to Rp 4,575. State gas distributor PT Perusahaan Gas Negara (PGN) shares rose 9.9 percent to close at Rp 1,220.
PT International Nickel Indonesia (INCO), the country's largest nickel miner, saw its shares jump 9.9 percent to close at Rp 1,450, while shares in PT Aneka Tambang (Antam) rose 9.8 percent to 1,010. Shares in tin producer PT Timah advanced 9.1 percent to close Rp 1,080.
Bloomberg also reported that shares in PT Gudang Garam, the country's second largest cigarette maker, rose 8.6 percent to Rp 3,800, snapping a six-day 35 percent slump. The company said its nine-month profit rose 23 percent after it raised prices and introduced new brands.
On the currency market, the rupiah rose the most in more than two years after rate cuts in the United States, China and Taiwan boosted stocks and gave investors more confidence in emerging-market assets.
The local currency climbed 2.1 percent to 10,675 against the dollar as of 4:28 p.m., compared with 10,900 on Wednesday, Bloomberg said. The gain is the largest since May 17, 2006.
The rupiah weakened to more than 11,000 per dollar earlier this week, prompting the government to introduce a set of policies to boost foreign exchange reserves and confidence in the currency.
They include requiring state companies to place their foreign reserves, including export proceeds, in domestic banks.
The government may also exercise currency swap arrangements with the central banks of China, South Korea and Japan to bolster its foreign exchange reserves. The arrangements amount to US$12 billion.