Southeast Asian markets: Indonesia up after rate rise

Indonesian stocks eked out small gains on Friday after an interest rate rise soothed inflation concerns and Thai stocks rose to their highest in almost two weeks after a surge in the shares of heavyweight PTT Exploration. Market volume remained weak due to the Lunar New Year holidays in much of Asia, including Singapore, Malaysia and Vietnam.
Turnover on the Thai market was 0.85 times its 30-day average and Indonesia's 0.64 times. PTT Exploration and Production (PTTEP) rose after it said it would resume operations at its Montara oil field off Australia in the fourth quarter after the Australian government gave it the go-ahead despite a massive 2009 oil spill. The subsequent jump in its shares sent the benchmark SET index as much as 1.5 percent higher.
PTTEP, Thailand's second-most valuable company after its parent, PTT, eventually ended up nearly 6 percent and the SET index was up 0.4 percent at the close, losing some of its gains to late selling. A rerating of PTT Exploration is under way, boding well for the stock along with its group and the broad stock market, said Pichai Lertsupongkij, head of investment advisory at broker Thanachart Securities.
"There's still more upside on PTTEP shares and its parent PTT. The two stocks weigh one-fifth on the market and could support a SET index rise to 1,000 in the short term," he said. It ended at 984.78 on Friday. Thai stocks, along with most others in the region, have suffered foreign outflows this year as concerns about inflation and more interest rate rises prompted investors to take profits.
MSCI Thailand has lost 4.3 percent this year, trailing an 8.3 percent drop in MSCI Philippines and a 7.3 percent fall in MSCI Indonesia. In Jakarta, the main share index recouped a loss, ending up 0.4 percent, after the central bank raised its benchmark interest rate 25 basis points to 6.75 percent to address inflation worries, with top firm Astra International up 0.7 percent.
Some investors had been looking to the central bank to raise interest rates from a record low to contain price rises after higher-than-expected inflation in January. Economists had been split. Eight of 15 economists polled after Tuesday's inflation data had expected no change to a rate that had been at a record low for 18 months. The other seven had expected a rise. Shares in the Philippines fell 0.4 percent after annual inflation jumped in January, hardening expectations the central bank would soon have to join its neighbours in raising rates.