Rupiah Bullish on Jokowi Win
9 July 2014 11:04 WIB
TEMPO.CO, Jakarta – On Tuesday, July 8--the day before the presidential election, the rupiah closed 86 points (0.74 percent) higher at 11,626 per US dollar, continuing to appreciate against the dollar for four consecutive days.
Monex Investindo Futures analyst, Daru Wibisono, said investors are confident that the election will produce a new leader that meets the market's expectations. "From the Asia-Pacific region there were no meaningful sentiments, so this election was a more dominant sentiment," he said yesterday.
Market participants—referring to the polls by credible survey agencies—are certain that Joko Widodo and Jusuf Kalla would win the presidential election. This confidence encourages them to compete in selling their US dollar while purchasing assets denominated in rupiah. In the stock market, foreign net buy even reached Rp 1.7 trillion in just two trading days.
Technically, the rupiah is in a bullish position. If Jowoki and Kalla indeed win this election, the rupiah is expected to skyrocket, penetrating Rp11,500 per US dollar within one or two days of trading. But, if Prabowo and Hatta win, the rupiah could be corrected to around Rp11,800 to Rp11,900 per US dollar.
However, given the election is just a temporary sentiment, market players still need to be wary of post-election sell-offs. Moreover, the rupiah still lacks fundamental support from domestic economic data and a strong trade surplus. "Today, the rupiah will be traded in the range of Rp11,650 to Rp11,760 per US dollar," Daru said.
PDAT | M. AZHAR