January 13, 2014 / 5:36 AM / 4 years ago

Indonesian shares jump, banking stocks lead rally

JAKARTA, Jan 13 (Reuters) - Indonesian shares rose 2.6 percent at midday, driven by banking stocks that jumped 4.2 percent on higher deposit rates and better liquidity outlook.

Indonesia Deposit Insurance Corporation (LPS) raised the guaranteed rupiah deposit rate for commercial banks by 25 bps to 7.5 percent and that for rural banks by 25 bps to 10 percent, the agency said in a press release on Friday evening.

“The move is positive for banks’ liquidity. State-owned banks’ share prices have dropped and now the valuation is cheap. We are still waiting for the full-year results and if it’s not as bad as expected, banking stocks will continue to rise this year,” said Robby Hafil, banking analyst at Jakarta-based Trimegah Securities.

State-controlled lender Bank Rakyat Indonesia jumped 7.24 percent to 8,150 rupiah while peers Bank Mandiri and Bank Negara Indonesia rose more than 5.8 percent each.

Mining stocks also rose 1 percent on mineral ore ban regulation which boosted nickel and iron price . Vale Indonesia rose 5.7 percent while Aneka Tambang was up 2 percent.

The blue chip index was up 3.4 percent. (Reporting by Andjarsari Paramaditha; Editing by Gopakumar Warrier)

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