Peaceful election boosts rupiah, stock market<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
The local currency and stock market edged higher on Tuesday
\nafter the country successfully completed what will probably turn
\nout to be the first round of its first direct presidential
\nelection on Monday, generating positive sentiment in the market
\nand luring back foreign investors, market experts said.<\/p>\n
Currency analyst Ferry Latuhihin of Bank Internasional
\nIndonesia said that the rally both in the currency and the stock
\nmarket was primarily fueled by political relief following a
\ntrouble-free polling day.<\/p>\n
\"This is simply relief. The jitters over violence during the
\nelection have faded away, boosting investor confidence in the
\nlocal market and easing political uncertainty,\" said Ferry.<\/p>\n
Ferry added that the market was also comfortable after it
\nbecame clear that presidential candidate Susilo Bambang Yudhoyono
\nwould almost certainly be in the runoff on Sept. 20.<\/p>\n
Former general Susilo, who is also a former top security
\nminister of incumbent president, Megawati Soekarnoputri, appears
\nto the favorite of the financial market. So far, he is leading in
\nthe preliminary ballot count.<\/p>\n
Due to the positive sentiment, the rupiah at one point in the
\nday strengthened to beyond the psychologically important level of
\nRp 9,000 per dollar, briefly touching the Rp 8,920 level.<\/p>\n
But as some investors engaged in profit-taking, the local unit
\nended the day at Rp 9,020, still 1.4 percent higher than Friday's
\nclose of Rp 9,150. The market was closed on Monday for the
\npresidential poll.<\/p>\n
The local currency's new-found vigor compared to last week was
\nin marked contrast to previous weeks, which saw the rupiah
\ndamaged by expectations of an aggressive rate hike in the United
\nStates, and security concerns ahead of the election.<\/p>\n
Ferry expected the rupiah to be traded at between Rp 8,838 and
\nRp 8,850 per dollar over the remaining months of the year.<\/p>\n
\"These rates are generally fair for both exporters and
\nimporters. We should not be hoping for the rupiah to go back to
\nRp 8,400 or Rp 8,500 in the short term as this would only attract
\nspeculators,\" said Ferry.<\/p>\n
On the stock market, the Jakarta Composite Index continued its
\nrally, after booking a 3 percent gain last week, mostly on the
\nback of a trouble-free election and positive regional sentiment,
\nan analyst said.<\/p>\n
The Index skyrocketed by 23.230 points to end at 768.255, with
\na volume of 2.37 billion shares worth Rp 1.53 trillion (US$170
\nmillion) being traded.<\/p>\n
\"The (stock market) gains are attributed mostly to active
\nbuying in selected bluechips by foreign investors who are lured
\nback by the evidence that the earlier fears of disturbances were
\nbaseless,\" said an analyst at a local brokerage firm, adding that
\nthe Index would likely trade at between 770 and 780 over the next
\ncouple of weeks.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/peaceful-election-boosts-rupiah-stock-market-1447893297",
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