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Jokowi, ARB, or Prabowo?

After waiting so long, on April 9th, ​​Indonesian people finally held the legislative elections, and as usual the results can be known shortly afterwards. Based on data from the quick count, there are three winning parties of this election, ie PDI-P, Golkar, and Gerindra. The cadres of the losing party would say that this is just the result of the quick count, and that we have to wait for the official count from the Commission of Election (Komisi Pemilihan Umum/KPU). However, based on the experience of previous elections (including local elections), the results of quick count will not differ much than the results of official count, in which the top three above is not likely to change.

For stock market investors, they might not pay attention to which party that wins the election. However, from the results of this election then we can guess about who will be the President of the Republic of Indonesia. Because, based on the rules of the Constitutional Court, a party may send its own cadre to run for President only if it got votes of at least 25% in the legislative election, and/or 20% of seats in the House. If these requirements are not met, then the party in question should form a coalition with other parties so their votes would pass the quota of 25%.

Then, based on the results of the quick count from Indonesian Survey Circle (Lingkaran Survei Indonesia/LSI), the top three parties are PDI-P with 19.7% of the vote, Golkar with 15.0%, and Gerindra with 11.8%. This means that, although the above three parties must seek support from other parties to fulfill the percentage of votes in order to prepare their cadre (or chairman) to run for President, but the candidates are clearly only three, and they are Joko Widodo (Jokowi), Aburizal Bakrie (ARB), and Prabowo Subianto.

Well, the question is, which candidates that would favor the market? To discuss the issue, maybe we can start from the profile of each candidate, of course, seen from the points that has correlations with the Indonesian stock market.

Joko Widodo (Jokowi)

Jokowi is not a stock market guy, but was only a regular furniture businessman before then turning to politics in 2005 as a Mayor of Solo/Surakarta, Central Java. As a mayor, Jokowi successfully brought Solo into an orderly town and even drew international attention because he was the only mayor in Indonesia, which could discipline street vendors without violence, not including other achievements. Thanks to these achievements, in 2010 Jokowi re-elected as Mayor of Solo with the 90.1% percentage of votes, which become a record to date.

In his second period as Mayor of Solo, Jokowi continued his work just as good as before, and he started gaining national (and even international) attentions. In 2012, he was nominated as Governor of Jakarta, and he successfully get rid of the incumbent, Fauzi Bowo. Then in just over one and a half years as governor, Jokowi once again successfully brought a positive change for the City of Jakarta, and his increasing popularity becomes unstoppable. In early 2014, precisely in March, Jokowi nominated as the President of the Republic of Indonesia, and is practically become the strongest candidate among other presidential candidates.

Compared with the other two presidential candidates, Jokowi is very popular in the eyes of many people, and it's not because he has real achievements in the field of government (in his capacity as mayor and governor), but because he was described as a honest and humble leader in the midst of a bunch of corrupt politicians. Foreign media were immediately see Jokowi as ‘The actual leaders of Indonesian people', may similarly to Aung San Suu Kyi in Burma, South Africa's Nelson Mandela, or Mahatma Gandhi in India. And Indonesia will be able to advance in both economic and other fields, only if its leader is trustworthy, is not it?

In addition to his humble attitude, Jokowi is also very quick in executing infrastructure development in Jakarta. Including the construction of Mass Rapid Transit (MRT) in Jakarta, which was previously only a discourse, is directly in progress when Jokowi became its supervisor, and this is of course addressed positively by investors - both local and foreign, who intend to invest in the country, because all this time, the biggest problem of Indonesia lies in the lack of infrastructure. There is great hope that if Jokowi become President, then the development of infrastructure in Indonesia will be done more quickly. And if it is realized, then it means that Indonesia will have a better economic growth. Including Jakarta Composite Index (JCI), which was already running pretty fast during the administration of President Susilo Bambang Yudhoyono (2004 - 2014), also will rise even higher.

In essence, if Jokowi elected as President, then it would give a positive impact on the market, because Jokowi offers two things at once, namely integrity, which is reflected in the form of honesty and modesty, and commitment in building the country, which is reflected in his hard work to build the infrastructure. You know, it’s not easy to find a state official that is not corrupt, let alone willing to work real hard for people.

Aburizal Bakrie (ARB)

In contrast to Jokowi, ARB is a high-profile businessman that is certainly familiar with the world of the stock market, where he is the owner of one of the largest conglomerates in Indonesia: the Bakrie Group. Unfortunately, since he entered politics in 2004, he had no achievements, or he had but are not visible. Also, in his each political campaign, it was not clear of what he has to offer to the people if he is elected as the President, except normative things such as employment, the provision of capital for small businesses, a better education and health, etc.

But on the other hand, ARB’ track record as the businessman is fairly bad. By not ignoring the existence of other people in the Bakrie Group, he is the most responsible person for the losses suffered by the investors who hold the shares of Bakrie Group. In 2008, ARB also 'kicked' one of the most popular person in the stock market, Sri Mulyani (who served as the Minister of Finance), just because she revoked the trading suspension of Bumi Resources (BUMI) when it is down. And a variety of cases such as Lapindo, tax evasions, until Bakrie Life, helped complete such 'achievements'.

The point is, if ARB is elected as president, then the market will likely to respond negatively. We don’t know about his track record as a politician, but in the stock market, he is clearly one of the 'bad guys'.

Prabowo Subianto

Prabowo is the only candidate who has a military background, but he is also a businessman. Compared to Jokowi, he does not have a clear achievements in Government, but compared to the ARB, he offers something ‘tangible’ for the people if he is elected as the President, namely: Making Indonesia as the Tiger of Asia, with a detailed development programs and a long term vision to restore the glory of Indonesia, just like the era of President Soeharto. Yep, though not entirely successful, however, Prabowo has assured the public that he has similar figure to Soeharto, which also his father in law, both in terms of firmness and integrity.

Unfortunately, although some of Indonesian citizens quite like him, but foreign investors do not like this former commander of Indonesian Special Forces, because it was feared that he would bring Indonesia back to the days of 'dictatorship', where the presence of foreigners in Indonesia will be complicated. Leading news companies like the NYTimes had write negative articles against Prabowo, and some superpower like the United States are also clearly does not like him. This means that if Prabowo gaining the seat of President, then foreign investors will probably getting out from Indonesia, including from the stock market.

In the open, in one of his political speeches, Prabowo also had criticized the government who prefers to take care the stock market rather than the keeping the low price of food and education for grassroot people. I don’t know, but I think if later Prabowo elected as President, then although Jakarta Composite Index (JCI) fell down to 2,500, he would probably not take any action. It must be admitted that during the administration of President Susilo Bambang Yudhoyono, the government had gave enough care to the stock market, where the finance minister and other relevant officials would move quickly every time the index fell, including at the event of 2008 crisis. But at the time of Prabowo later, the stock market may not be privileged again.

In conclusion, if later Prabowo was elected as president then the market is likely to respond negatively, though it may be a little better if it was ARB that elected, because at least Prabowo never playing with junk stocks like Bakrie does.


Based on the description above, as a stock investor you may hoping that Jokowi will win the presidential election in September. And fortunately when compared with the other candidates, Jokowi indeed the strongest candidate, besides his party, PDI-P, also successfully won the legislative election.

However, there is no guarantee that Jokowi will win, because ARB and Prabowo is also not without opportunities. Jokowi also have to choose a running mate (for vice president) from another party (outside the PDI-P), because PDI-P only has votes of less than 20%. The problem is, if it turns out that the vice president is a figure that is not appreciated by the public, then it will also lower the electability of Jokowi. The situation would be different if PDI-P had successfully achieved significant votes, so Jokowi becomes free to select his own vice president, including popular figures like Sri Mulyani, Anies Baswedan, or Dahlan Iskan. But unfortunately it is almost impossible to happen because PDI-P must form a coalition with other parties.

And maybe that’s why the market was 'disappointed', where the JCI tumbled more than 3% on Thursday, April 10, 2014. Because, what would happen if Jokowi took Rhoma Irama, for example? Make no mistake, the dangdut legend also has the chance! Because his party, the National Awakening Party (Partai Kebangkitan Bangsa/PKB), has successfully occupied the fifth position in the last election.

The point once again, there is no guarantee that Jokowi will win in the presidential election, and that's why the market can moving very volatile until next September, in which every political event that strengthens the position of Jokowi will be responded positively by investors, and vice versa, every political event that weakens the position of Jokowi will be responded negatively. Today the market may be dropped, but if later there is an event that is good for Jokowi’s nomination as President, then investors will buy the stocks, and JCI will fly once again. But if the opposite happens then of course, JCI will dropped further. We never know. So instead of trying to figure out whether Jokowi will win or lose in the next presidential election, we should focus on the value of the index itself. At the end, the position of JCI at this time was a bit overvalue anyway.

Okay, that's all from me. So what do you think?

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