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Market largely unfazed by new Jakarta leaders
A day after the Jakarta gubernatorial election the stock market had a slightly negative welcome for the capital’s new leaders but analysts stress that the outlook ahead remains good
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day after the Jakarta gubernatorial election the stock market had a slightly negative welcome for the capital’s new leaders but analysts stress that the outlook ahead remains good.
The Jakarta Composite Index (JCI), the benchmark of the Indonesia Stock Exchange, closed down 0.2 percent to 5,595.31 on Thursday.
The rupiah, meanwhile, rose modestly by four points against the US dollar to Rp 13,323.
As Anies Baswedan, a former education minister, and his running mate, businessman-cum-politician Sandiaga Uno, led the quick count over incumbent governor Basuki “Ahok” Tjahaja Purnama and Djarot Saiful Hidayat, the market actively traded shares of private equity and venture capital firm PT Saratoga Investama Sedaya, owned by Sandiaga, as well as investment company PT MNC Investama, belonging to tycoon Hary Tanoesoedibjo.
Hary and his United Indonesia Party (Perindo) backed the winning candidates alongside the Gerindra Party.
Saratoga opened the morning trading at Rp 3,700 per share and peaked to Rp 4,450 per share before ending at Rp 3,600. Meanwhile, MNC began the trading at Rp 124 and later climbed to its highest level of Rp 126 and close at Rp 123.
Downward movements were seen in property and construction stocks, such as those in state-owned construction firms PT Waskita Karya and PT Pembangunan Perumahan, which were down by 2.46 and 3.57 percent, respectively.
PT Agung Podomoro Land, which is closely tied to Ahok and in the past made significant contributions to the Jakarta administration, saw its price slump by 7.08 percent to Rp 210 per share.
Reliance Sekuritas analyst Lanjar Nafi said the decline in property stocks was mostly triggered by the worry over the continuation of the Jakarta Bay reclamation project.
“The quick count winner is the pair who rejected the reclamation project and this makes investors skeptical about property construction in Jakarta,” Lanjar said in his research note.
However, Bahana Sekuritas’ head of research Harry Su expressed a different view, saying that after the election, business in the capital could progress again without worry as seen in the period leading up to the election.
“Corporations and investors can focus again on their business because there is no more reason to protest against Ahok,” he said.
Jakarta, home to more than 10 million residents, including people from other parts of the country, plays a key role in the country’s economy as nearly 20 percent of the national output is generated in the province.
In the past few months, several rallies have taken place to protest against Ahok, a Christian politician of Chinese descent, who had been accused of religious defamation, in the world’s largest Muslim-majority country.
Harry of Bahana further said that Anies-Sandiaga’s political promises were not much different from those of their rivals, but they might face significant challenges, namely proving they were better than their predecessors.
Separately, OCBC Bank economist Wellian Wiranto said the result of the Jakarta election did not have a significant impact on foreign investors in Indonesia.
“Sure, Jakarta is important, but Indonesia’s economy is more than just Jakarta. Do they [foreign investors] care about the Jakarta election? Yes. But do they care much about it? Not really,” he said.
Wellian said foreign investors considered strong domestic growth momentum the most important thing for them, referring to the continued decentralization and ongoing policy reforms to drive economic expansion. (yon)
