Indonesian President Confirmed Stocks Have Risen 22% This Year

The Jakarta Composite surged to a fresh 15-month high Friday morning after Joko Widodo was confirmed as president of the world’s third-largest democracy.

Stocks powered to a high of 5223.975 in early trade before falling slightly, while the rupiah strengthened 0.3 percent to 11,662 rupiahs per U.S. dollar after Indonesia’s highest court upheld the July election result on Thursday. The result was in question after losing candidate Prabowo Subianto claimed that Joko Widodo – commonly known as Jokowi– cheated.

Whether or not upward momentum continues depends on Jokowi’s ability to push through promised reforms, according to Seng Wun Soon, regional economist at CIMB bank.

“A lot of the optimism and euphoria about Jokowi’s victory has already been priced in to the market,” said Soon.

Indonesian stocks are up 22 percent year-to-date, while the rupiah has rallied around 4 percent against the dollar.

“Going forward valuations are not as attractive…I would be a bit cautious… and now it’s about markets keeping a close eye on Jokowi and making sure he delivers on other measures like reforms and other things that will boost the economy,” added Soon.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza