Indonesian Rupiah and Stocks Plunge after 2014 Legislative Election Result
Investors were not happy to see the parliamentary election result of Indonesia on Wednesday (09/04). The fragmented outcome implies continued political uncertainty toward the July 2014 presidential election. None of the Indonesian political parties were able to secure a majority in the legislative election, meaning it will be more difficult to pursue a clear and steady political course over the next five years. The PDI-P, which was forecast to secure an impressive victory on the 'Jokowi effect', was unable to record a large victory.
As a consequence, Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG) had plunged 3.16 percent to 4,764.70 by 11:55 local Jakarta time. Meanwhile, the Indonesian rupiah exchange rate had depreciated by 0.60 percent to 11,356 per US dollar around the same time based on the Bloomberg Dollar Index.
Foreign net selling on the Indonesia Stock Exchange amounted to IDR 989.2 billion (USD $87.5 million) in the first trading session on Thursday (10/04). Some big cap stocks that felt the negative impact were Indocement Tunggal Prakarsa (-8.82 percent), Astra International (-6.23 percent), Bank Mandiri (-5.83 percent), and Bank Rakyat Indonesia (-4.91 percent).
Further Reading:
• Analysis of Quick Count Results of the Indonesian Legislative Election 2014
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