TEMPO.CO, Jakarta - Yesterday's ruling on the election result dispute case by the Constitutional Court (MK) has removed a degree of uncertainty in the political arena and is expected to positively impact on the Indonesian Stock Exchange (IDX).
"The MK ruling has given a confidence boost for market players, which in turn will assist in prolonging the index's uptrend that has been afoot for quite some time," an analyst at Asjaya Indosurya Securities, Willian Suryawijaya, told Tempo on Thursday evening, August 21, 2014.
William said the decreasing uncertainty would also have an immediate positive effect on the rupiah exchange rate,and that the rupiah value would remain between Rp11,000-12,000 per US dollar. "The range is quite wide because market players will be euphoric as a result of the ruling," he explained.
According to William, the majority of investors have since long been able to predict who will become Indonesia's 7th President and such expectations have contributed to the general uptrend of the index and the rupiah.
"Apart from internal factors, external factors such as the general positive growth of the global economy have also contributed to the gains experienced by Indonesia," he said.
The index is predicted to hover around 5,150-5,244 points, said William. Investors should watch out for gains in the infrastructure and mining sectors as well as a number of media companies' shares.
AMOS SIMANUNGKALIT | DINI PRAMITA