Investors were optimistic that former general Susilo Bambang Yudhoyono has won a landslide victory in presidential elections and would kick-start needed economic reforms.
"The market has seen Yudhoyono as a force that could make some of these reforms come about," economist David Fernandez with J.P. Morgan Chase in Singapore said yesterday.
Markets will likely also benefit from the peaceful polling across this 13,000-island archipelago, which proved the world's most populous Muslim country can hold a smooth and organized democratic election.
At midday, the Jakarta Stock Exchange Composite index was up 0.6 percent, or 4.8 points, at 819.443, down from an intraday record high of 829.571. Traders expect the main index to end above the previous all-time closing high of 818.159 points.
The US dollar fell 0.6 percent against the Indonesian rupiah currency. The dollar was at 8,977 rupiah, down from its close Friday at 9,030 rupiah.
But the gains may be short-lived. Markets are expected to soon shift their attention to the challenges facing Yudhoyono, analysts said. These include a potentially hostile parliament and an entrenched political elite that could fight a rearguard action to block reform.
Foreign investors will also be keen to see whom Yudhoyono appoints to key economic jobs in his Cabinet. That might not become clear before Oct. 20, the date set for the formal presidential inauguration. An official election result is due Oct. 5. Yudhoyono has so far sketched only a vague outline of policies he will follow.
With nearly half the votes counted early yesterday, Yudhoyono had about 60 percent to President Megawati Sukarnoputri's 40 percent, according to the General Election Commission.
Indonesia's economy will grow about 5 percent this year, but, unlike many other Southeast Asian nations, it has failed to fully recover from the 1997-1998 regional financial crisis.
Many foreign investors have stayed away, put off by Megawati's failure to tackle corruption and push through reforms needed to restore economic health.
Yudhoyono, although he served as Megawati's security chief before challenging her for the presidency, has distanced himself from her administration, promising to fix the sluggish economy, crack down on rampant graft and provide jobs for the country's 210 million people.
He is viewed as an economic pragmatist, analysts said, and his victory is expected to be welcome by Indonesian-Chinese investors, who may now put money back into the rupiah and stocks from offshore accounts.
Despite Yudhoyono's popularity with voters, who see him as offering a fresh start, he lacks a well-organized political machine.
Yudhoyono has shown some signs he's willing to take on the elite that ruled Indonesia for 32 years under Suharto and which has largely remained in place despite the emergence of a democratic system. Last week, Yudhoyono said he would punish former bank owners who misused US$16 billion in emergency loans during the Asian crisis but have so far paid back only a fraction of that amount.
The new president's Cabinet appointments will give an early sign of what policies Yudhoyono will follow, Fernandez said.
Many hope Finance Minister Boediono will remain in his position after helping steer Indo-nesia's government finances from the brink of bankruptcy in the past few years. Economists credit Boediono as the architect of the main achievement of Megawati's government, allowing the country to graduate this year from its IMF emergency borrowing program.
Also of keen interest internationally will be whether the new president retains oil minister Purnomo Yusgiantoro, who also is currently serving as OPEC's president.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
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