HONG KONG/JAKARTA (Reuters) - Unofficial "quick counts" in Indonesia's election on Wednesday, based on data from polling stations, gave incumbent President Joko Widodo, or Jokowi, a substantial lead over ex-general Prabowo Subianto.
According to a quick count by the Jakarta-based Center for Strategic and International Studies (CSIS), Widodo had an 11 percentage point lead with 76.8 percent of the votes counted.
Two other pollsters showed Widodo holding a roughly 10 percent lead.
In previous elections, the quick counts from reputable pollsters have proved to be accurate.
The official results will be announced by the election commission on May 22.
Expectations that Jokowi, a former furniture salesman who launched his political career as a small-city mayor, would win a second five-year term have helped buoy markets this year. The rupiah is up more than 2 percent against the dollar while the stock market has risen 4.6 percent.
Indonesian markets were closed on Wednesday for the election.
ANDRY E. TANELI, FUND MANAGER, CIPTADANA ASSET MANAGEMENT, JAKARTA:
"If there are no changes in lead, the market tomorrow will react positively.
"Jokowi's infrastructure programme has shown good progress, going forward he should address the concern about consumer spending, which needs to be boosted.”
"Jokowi is the incumbent so there should be stability into the next term and this would be his last term, we are hoping his cabinet will be more all-out in their roles, with not too much politics."
IVAN CHAMDANI, FUND MANAGER, MAYBANK ASSET MANAGEMENT IN JAKARTA
"It's good that most probably the incumbent will win since that would mean a lot more predictability. What Joko Widodo is doing right now is constructive and there should be continuity to what he's doing.
"For the market, of course this will positive for tomorrow. There might be some 'sell on the news', but I think that the incremental inflow would be better if Jokowi wins, meaning that investors who are not in yet will gradually come into Indonesian markets, instead of being more apprehensive if Prabowo wins, because they know what to expect."
JOSUA PARDEDE, ECONOMIST, PERMATA BANK, JAKARTA:
"structural reform will continue and this is very crucial because of continuity in economic growth. The past five years (development) was physical and the second term will focus on build non-physical infrastructure and it is the main focus although infrastructure development budget is still pretty high.
"The government need to set their priority scale to spend the budget more efficiently and lower debt. We are hoping that exports can boosted which mean addressing manufacturing issues.”
"Social assistance will also be prioritised since our economy rely on commodities and there is a need for short to medium-term support for household consumption.”
STUART RITSON, PORTFOLIO MANAGER, EMERGING MARKET LOCAL CURRENCY DEBT, AVIVA INVESTOR, SINGAPORE:
"This looks like quite a decent victory for Jokowi, caveated by fact that we’ve only counted two-thirds so far. But if this sort of margin continues, the currency can trade well. We're already seeing NDF market trading three quarters of a percent stronger. That will translate into stronger rally in bonds when they open."
JULIAN WEE, INVESTMENT STRATEGIST, CREDIT SUISSE, SINGAPORE
"(Widodo's lead in the quick count) is in the upper end of market estimates. You could get a bit of a boost to the rupiah, it may open below 14,000 tomorrow, and local equity market may get a boost as well.
"The impact will probably be felt more in the currency and equity market. People (in government will be) disciplined on fiscal side so probably will not have that much impact on the bond market.
"If it's a very wide margin (of victory), it doesn't make much sense to mount much of a (legal) challenge. It would be very hard to make a case."
SATRIA SAMBIJANTORO, ECONOMIST, BAHANA SEKURITAS, JAKARTA:
"The fact that this election has concluded peacefully should take a burden off investors' backs... The 10 percentage points lead margin for the incumbent president, if various quick count results materialise into reality, should also provide impetus for medium-term economic reforms.
"Over the past few days, trading volume in Indonesia's equity and fixed-income markets are relatively low. Positive economic indicators from hefty trade surplus and benign inflation were largely shunned by foreign investors, who opted to wait on the sidelines over fears of elections-associated uncertainty.
""Amid the surge in global asset prices this year, Indonesian bonds and stocks have been lagging behind. Now, foreign fund managers should not miss the rally: We target the rupiah to appreciate below 13,800 per dollar by early May, with expectations of very strong foreign inflows to Indonesian assets due to the positive political atmosphere."
GRZEGORZ (GREG) KONIECZNY, CO-FOUNDER OF MOBIUS CAPITAL PARTNERS, LONDON:
"The results bring further stability and predictability, and this is what investors like.”
TAY EK PON, SENIOR PORTFOLIO MANAGER, EMERGING MARKET FIXED INCOME, BNP PARIBAS ASSET MANAGEMENT, SINGAPORE
"(A Widodo victory) has mostly been priced in, in the bond as well as currency markets. I don’t expect significant reaction in FX. Foreign investors have already increased exposure to the currency this year on the back of dovish central bank (policies).
"55 percent is a bit narrower than the polls were predicting. There is a risk of narrower majority or a dispute over the result. That could create some near-term uncertainty and drive credit spreads wider. But in that event, I would probably add to my position in Indonesian bonds. Indonesia has shown resilience, economic growth is expected to hold up around 5 percent.
"I think if it's the same government that is elected, they will continue their commitment towards fiscal discipline"
JON HARRISON, MANAGING DIRECTOR, EMERGING MARKETS MACRO STRATEGY, TS LOMBARD, LONDON:
"This is clearly positive. Investors have been nervous about the risk of a change of government and policy. Investments that people have been putting off will now be prepared to go ahead.
"Particularly if (Widodo's share of the vote) is 55 percent, that is a decisive mandate. A narrower margin could give rise to accusation of (election) fraud and so on. This is a good outcome for the market."
"The (Indonesian) central bank is going to be very cautious about letting the rupiah rally too much, and the bond market as well. But foreign investors should be relieved about this. It is in line with opinion polls and expectations."
(Reporting by Noah Sin in HONG KONG, Marc Jones in LONDON and Fransiska Nangoy, Maikel Jefriando and Gayatri Suroyo in JAKARTA; Editing by Richard Borsuk)
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