JCI Suffers from Political Blows

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  • TEMPO.CO, Jakarta – Today's People's Consultative Assembly (MPR) speaker election is expected to affect a stock market that is still gloomy over last week's DPR chairman election. Investa Saran Mandiri analyst Kiswoyo Adi Joe estimated if someone from the Red and White Coalition is elected as the Assembly speaker, the index will weaken.

    "Investors today tend to be reactive to any anything related to politics," Kiswoyo said yesterday.

    With the Red and White Coalition achieving one victory after another—starting with the regional elections bills, the MD3 Law, and the House of Representative's speaker—investors are growing restless and doubtful about political stability in Indonesia, which prompt them to sell. Concerns that the opposition will overshadow the new government cause investors to worry, as seen from Jakarta Composite Index's sharp corrections over the past two weeks.

    Last week, the DPR speaker seat was secured by the Red and White Coalition. The decision immediately pushed the index down by more than 2.5 percent in two consecutive days with capital outflows totaling at more than Rp2.4 trillion.