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Stock market to stay bullish after election
The unofficial results that showed Jokowi had defeated contender Prabowo Subianto by a comfortable margin led to the surge in share prices.
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Incumbent President Joko Widodo shows the ballot paper at a polling center during the presidential and legislative election in Jakarta on April 17, 2019. (JP/Seto Wardhana)
T
he upward trend in share prices and the rupiah’s exchange rate will continue this week as investor confidence grows after unofficial election results showed that incumbent Joko “Jokowi” Widodo had received the people’s mandate to continue to lead the country for the next five years.
Share prices and the rupiah rallied on Thursday, the first trading day after the general elections, as investors poured more money into the stock market as they were confident that the reelection of Jokowi would bring more certainty to the economy.
On Thursday morning, the Jakarta Composite Index (JCI) rose to its highest level of 6,636.33, while the rupiah strengthened to Rp 14,000 per US dollar. However, the index slightly declined in the evening, closing the day at 6,507.22, while the rupiah declined slightly to end the day at Rp 14,044.5 per US dollar on the spot market.
The unofficial results that showed Jokowi had defeated contender Prabowo Subianto by a comfortable margin led to the surge in share prices. However, the decline in share prices in regional markets and Prabowo’s claim that he also led the polls halted the price rallies. Prabowo told a news conference at his home in Jakarta that he won by 62 percent over the incumbent, based on the votes his team had recapitulated.
Binaartha Parama Sekuritas analyst Nafan Aji said the euphoria from the election did not last long as the decline in share prices in the global market affected evening trading.
“The slump in share prices in regional markets halted the price rallies in Jakarta during evening trading,” he told The Jakarta Post.
Major share price indexes in Asia, such as Japan’s Nikkei, Hong Kong’s Hang Seng, China’s Shanghai Composite Index and Singapore’s Straits Times Index, were in the red on Thursday despite reports of the higher-than-expected growth of the Chinese economy.
