Market Welcomes Jokowi Lead
11 July 2014 16:50 WIB
TEMPO.CO, Jakarta – The quick-count polls showing Joko Widodo and Jusuf Kalla's lead in the presidential race managed to boost the index and the rupiah exchange rate. In yesterday's trade, the Jakarta Composite Index (JCI) surged to 5,098 basis points, up 73 points from the previous trading day. Meanwhile, the rupiah gained 52 points, closing at Rp11,573 per US dollar.
The quick count results from seven pollsters showed that Jokowi-Kalla has a 5-percent margin ahead of rival Prabowo Subianto-Hatta Rajasa. Jokowi and Kalla have so far bagged 53 percent votes while Prabowo-Hatta got about 47 percent. Following the quick count announcement, almost all stocks experienced price gains.
"The Jokowi euphoria pushed the index up significantly," Panin Securities chief researcher Purwoko said yesterday.
The rupiah, which has been bullish all week over Jokowi's likely win, also enjoyed the quick count result. "Although they are still waiting for the official count by the Election Commission on July 22, market players are certain that it will not differ much from the quick count poll," Platon Niaga berjangka analyst Lukman Leong told Tempo yesterday.
The belief that Jokowi has claimed victory encouraged investors to buy rupiah-denominated assets. "If the a quick count results showed that Jokowi wins by a landslide of more than 60 percent, the rupiah would have been in the 11,300 [per US dollar] range," said Lukman.
Tony Prasetiantono, and economist from the Gajah Mada University, said that the index and rupiah gained because the election result meets the market's expectation. "The market believes Jokowi has won, and they immediately responded with a positive capital inflow this morning (yesterday) of Rp1.8 trillion," he said.
But, despite the capital inflows, Tony said, the market's response has not reached an optimal point because Prabowo also claimed victory—based to the quick count result by survey agencies he referred to. "However, the market is aware that Prabowo's claim is weak because it is not supported by credible pollsters," he said.
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