Business News

Published: Friday August 22, 2014 MYT 11:32:00 AM
Updated: Friday August 22, 2014 MYT 11:40:15 AM

Green light for president-elect Widodo boosts Indonesian markets Friday

The Jakarta stock exchange rose as much as 0.3 percent to 5,223.975 points, the highest intra-day level since May 29 last year.  The rupiah also strengthened to 11,655 to the dollar. (Picture shows Indonesian president-elect Joko Widodo speaking to the media at a press briefing in the garden of his home in Jakarta August 21, 2014. - REUTERS)

The Jakarta stock exchange rose as much as 0.3 percent to 5,223.975 points, the highest intra-day level since May 29 last year. The rupiah also strengthened to 11,655 to the dollar. (Picture shows Indonesian president-elect Joko Widodo speaking to the media at a press briefing in the garden of his home in Jakarta August 21, 2014. - REUTERS)

JAKARTA: Indonesian stocks opened near a record high and the rupiah strengthened on Friday, a day after the country's highest court gave Joko Widodo the green light to lead Southeast Asia's largest economy from its worst slowdown since the global financial crisis.

The Constitutional Court, as expected, unanimously upheld last month's presidential election result, rejecting a last-ditch attempt by losing candidate Prabowo Subianto to force a re-vote. Widodo will begin his five-year term on Oct. 20.

The Jakarta stock exchange rose as much as 0.3 percent to 5,223.975 points, the highest intra-day level since May 29 last year.

The rupiah also strengthened to 11,655 to the dollar.

With the legal hurdles out of the way, Widodo said he planned to meet with outgoing President Susilo Bambang Yudhoyono to discuss the transition and pressing economic issues, such as ballooning fuel subsidy costs and a widening current account deficit.

"The next step is to get things ready, we will meet with the current president to get to know the problems. We will then start getting in talks with ministries," Widodo told reporters late Thursday.

Widodo, who is expected to soon step down as Jakarta governor, has formed a high-powered advisory team to handle his transition to power, choose a cabinet and prepare a policy roadmap.

The team is headed by Rini Soemarno, an influential, U.S.-educated businesswoman who served as trade minister and is a former head of PT Astra International, Indonesia's biggest automobile distributor.

"Going forward, we believe the political attention will shift towards (Widodo) forming his cabinet and the evolution of political support. Both will be the key for effective government in pushing structural reforms," said Mandiri Sekuritas in a research note.

Widodo has promised to form a cabinet that is dominated by technocrats in order to overhaul a sleepy bureaucracy and introduce much-needed economic reform to address big fuel subsidies, cooling investment and creaky infrastructure.

A senior member of the transition team told Reuters they would hold more advanced talks with the outgoing government about the possibility of a fuel subsidy cut before October.- Reuters

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