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Indonesia expects to see foreign inflows following Prabowo’s one-round win
Investors expect policy continuity after Prabowo secured nearly 60 percent of the vote based on preliminary election results.
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Presidential candidate pair Prabowo Subianto (left) and Gibran Rakabuming Raka walk on stage during the third 2024 presidential election debate at Istora Senayan in Jakarta on Jan. 7, 2024. The third debate covered issues of international relations, defense and security. (Antara/Aditya Pradana Putra)
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ndonesia is expected to see a surge of capital inflows in the coming months after Defense Minister Prabowo Subianto took a strong lead in the preliminary results of the presidential race, as investors perceive the outcome as continuity of the current government, which is deemed good for business.
Prabowo is set to succeed President Joko “Jokowi” Widodo after securing nearly 60 percent of the vote, according to several quick counts conducted by credible pollsters. With Jokowi’s eldest son Gibran Rakabuming Raka as his running mate, the pair’s lead is regarded as too big to challenge, analysts say.
The Indonesia Stock Market (IDX) Composite index reacted to the news positively, rising to 7,303 at closing time on Thursday, 1.3 percent higher than Tuesday’s close.
According to data from trading app Stockbit, the IDX booked Rp 2.73 trillion (US$174.9 million) of foreign net buys a day after the election.
Experts said the stock market rally showed that there was a positive influence from the election quick count results, as investors feel certainty about the policies that will be adopted by the new president.
“However, we need to be wary of potential lawsuits from losing candidates, which may disturb investors’ confidence in the short term, similar to our experience after the 2019 election,” said Isfhan Helmy, head of institutional research at the local brokerage Sinarmas Sekuritas, who spoke to The Jakarta Post on Thursday.
Almost five years ago, Prabowo, who lost against Jokowi, decided to challenge election outcome in the Constitutional Court, which was followed by days of violent demonstrations by his supporters.
