Retail, telecom firms to profit from political campaigns

Rendi A. Witular, The Jakarta Post, Jakarta

Shares of publicly listed companies in the retail and telecommunications sectors, as well as media, are projected to be the favorites among investors this election year, due to the intriguing political party campaign methods employed here.

Chief economist at Danareksa Research Institute Raden Pardede said over the weekend that the 24 political parties would be busy buying up plenty of food, medicine and household products to be used to win potential voters' hearts and minds, as part of their political campaigns.

"Political parties will stock up on goods to help attract supporters, such as instant noodles, mineral water, cigarettes and energy drinks. This will in turn help increase the sales at retail outlets all over the country," said Raden.

In most elections here, such seemingly questionable campaign methods have become commonplace, as a means to garner votes -- especially from poor voters and those that live in remote areas.

As would be expected such "campaigning" has often proven to be successful, as it takes advantage of the population's chronic unemployment and poverty.

According to Raden, the retail products would not only be used as a sort of food-for-votes program, but also to feed their loyal supporters during the many large campaign rallies in stadiums and other venues.

He predicted that some of the companies most likely to benefit from this type of campaigning were instant noodle producer PT Indofood Sukses Makmur, household and food producer PT Unilever Indonesia, drug producer PT Kalbe Farma, cigarette producers PT Gudang Garam and PT HM Sampoerna, and beverage companies PT Aqua Golden Mississippi and PT Ades Alfindo.

Aside from the food and drinks, the telecommunications sector is also projected to yield hefty earnings this year on an estimated surge in the use of cellular services.

"People will be increasingly reliant on their cellular phones to gather supporters or to inform others about developments at a given electoral event," said Raden.

Companies likely to profit in this sector are PT Telekomunikasi Indonesia (Telkom) and PT Indosat. He also said that media and public relations firms would see a healthy rise in sales and advertising revenue throughout the year, and a corresponding jump in stock prices.

Elsewhere, Samuel Tobing, investment director of state-owned workers insurance firm PT Jamsostek, concurred with Raden, saying shares of listed firms in the retail and telecommunications sectors would see handsome rises this year, due to spending during the election period. The voting will be from April to September, but campaign preparations have already begun.

"I think companies that can provide what is needed for various electoral events or political parties and their supporters will gain some momentum this year," he said.

Samuel added that Jamsostek would focus on investing its money in shares in the two sectors, as their stock prices were projected to increase significantly.

Jamsostek, the largest local investor in the stock market, plans this year to allocate around 10 percent of its total investment for stocks.

The company's current assets are said to reach Rp 25 trillion (US$2.9 billion).

During the election, voters will choose legislators on April 5, then the first round of the direct presidential election will be on July 5, with the second round on Sept. 20.

The 24 registered political parties will be vying for the 145 million votes on offer.