Jokowi Coalition Announcement Hoists JCI

TEMPO.CO, Jakarta – The domestic stock market experienced a significant increase following the official declaration of the coalition of political parties supporting Joko Widodo's candidacy in the upcoming presidential election. The declaration encouraged investors to buy shares, pushing the Jakarta Composite Index up by 70 points (1.4 percent) to 4,991.

Bank Mandiri's chief economist Destry Damayanti said the gain was mainly the result of political sentiments rather than economic data. "PDIP, NasDem, and PKB's declaration to nominate Joko Widodo provided a political certainty. The market is finally moving after being suspended by political uncertainties for the last few days," Destry said yesterday.

The strengthening of the index and the rupiah, Destry said, will not last long. The rapidly changing political situations will affect the market. In addition, the index is predicted to weaken once it reaches a high enough position.

A similar view was expressed by OSO Securities' analyst Mohammad Alfi Syahrin. Alfi said that investors like Jokowi as a political figure, so any support for theJakartagovernor will be responded positively by the market. "Foreign investors will not hesitate to re-enter the trading floor," he said.

Regarding the current political constellation, deputy chair of the Indonesian Chamber of Commerce and Industry Natsir Mansour said the market responded positively to Jokowi's nomination. This, he said, is based on PDI-P's economic platform which is considered pro-business. "PDI-P will boost growth and push for equity," he said.

The index is predicted to stay on an uptrend range of 4,967 to 5,055. Alfi said the JCI might also benefit from listed companies' dividend payouts scheduled to take place this month. He also said that the market uptrend is also caused by several issuers' technical increases, suggesting investors to keep their eyes on PGAS, BBNI, and BSDE.

BERNADETTE CHRISTINA | MEGEL JEKSON | ANGGA SUKMA | MUCHAMAD NAFI