Indonesia jumps to near 14-month high as Jokowi set for re-election

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BENGALURU (April 18): Indonesian stocks jumped to a near 14-month high on Thursday after early elections results indicated incumbent President Joko Widodo is likely to be re-elected for a second term, while Malaysia extended losses to a more than three-year low.

The quick counts showed Widodo winning the popular vote in the world's third largest democracy with about 54%, giving him a lead of around eight percentage points over former general Prabowo Subianto.

"A second Jokowi (Widodo) term is welcome by markets on policy continuity and modest reforms for Indonesia ahead," Mizuho Bank said in a note to clients.

Government insiders said he was poised for a splurge of reform, with sagging foreign investment, the troubled education system and restrictive labour rules on the list of areas he might tackle.

Morgan Stanley said in a note on Wednesday that it was time to brush aside tail risk concerns and buy Indonesian equities, citing "falling policy rates, the return of private sector confidence, and optionality around reform."

The key Jakarta stock index advanced as much as 2.4% to its highest since February 2018, before paring gains. Onshore markets were closed on Wednesday for the elections.

Lenders Bank Central Asia Tbk PT and Bank Mandiri (Persero) Tbk PT climbed up to 5.6% and 6.6%, respectively.

Meanwhile, Malaysian equities retreated for a third straight session after FTSE Russel flagged on Monday that it could drop the country from a key global bond index at the end of a review in September.

Removal from the index, which helps with exposure to wider global investors, increases the risk of foreign fund outflows.  

Elsewhere, Thai stocks lost as much as 0.3%, weighed down by the telecom and industrial sectors.

Advanced Info Service PCL slipped 1%, while Airports of Thailand PCL declined 0.7%.  

The Philippine stock market is closed on Thursday and Friday for holidays.

SOUTHEAST ASIAN STOCK MARKETS AS AT 0400 GMT

Market                 Current   Previous close  % move
Singapore              3349.08   3348.64         0.01
Bangkok                1670.99   1673.2          -0.13
Jakarta                6526.285  6481.541        0.69
Kuala Lumpur           1612.74   1620.9          -0.50
Ho Chi Minh            972.74    972.1           0.07

Change so far in 2019

Market                 Current   End 2018        % move
Singapore              3349.08   3068.76         9.13
Bangkok                1670.99   1563.88         6.85
Jakarta                6526.285  6,194.50        5.36
Kuala Lumpur           1612.74   1690.58         -4.60
Ho Chi Minh            972.74    892.54          8.99