{"id":49132,"date":"2014-03-28T16:18:47","date_gmt":"2014-03-28T20:18:47","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=49132"},"modified":"2014-03-28T16:18:47","modified_gmt":"2014-03-28T20:18:47","slug":"investors-shouldnt-bet-on-indonesia-election","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/03\/28\/investors-shouldnt-bet-on-indonesia-election\/","title":{"rendered":"Investors Shouldn\u2019t Bet on Indonesia Election"},"content":{"rendered":"

By WallStreetDaily.com<\/u><\/a> \"Investors<\/p>\n

Joko, Joko… He’s our man. If he can’t do it, no one<\/em> can! Eager voters and investors are looking to the 2014 Indonesia elections as the economy’s saving grace. With hopes for a better economy, optimism is at an all-time high.<\/p>\n

But before piling\u00a0all<\/em> of your cash into the market, wait one minute. Breakingviews’\u00a0<\/em>Andy Mukherjee tells\u00a0Reuters’\u00a0<\/em>Tara Joseph exactly why…<\/p>\n

Joko isn’t the Savior<\/strong><\/p>\n

Tara Joseph says, “While many emerging markets are floundering, Andy, let’s take a look at\u00a0Indonesia. The\u00a0Jakarta\u00a0stock market is up 10% so far this year. Analysts and investors are pretty excited about the upcoming election. There’s a new guy on the block. People think it’s going to herald a big change. His name is\u00a0Joko Widodo, better known as Jokowi. Is it really going to change things, though?”<\/p>\n

Andy Mukherjee says, “Well Tara, what I am arguing is that the election may not answer the investors’ prayer \u2013 and probably because investors are being a tad too optimistic. Mind you, I’m not forecasting a drop in share prices in the near term. What I am saying is that the reform expectations were equally high with President Yudhoyono 10 years ago. But those reforms never really materialized.<\/p>\n

“Now\u00a0Indonesia… [what] we must accept is a messy parliamentary democracy. Now to pin hopes on one man, even if he’s the president, can lead to eventual disappointment however well-meaning Jokowi might be. What will be important, therefore, is just what kind of control in parliament his party \u2013\u00a0Jokowi’s party, the PDIP \u2013 will have. Now that we will come to know next month.”<\/p>\n

Take a Lesson From India<\/strong><\/p>\n

Tara Joseph says, “Politics \u2013 interesting, important. Joko \u2013 a very populist man who might change things if he’s elected. But commodities, that’s what it’s about in Indonesia\u00a0when it comes to the economy. And we all know that\u00a0China’s slowing down, so demand is shifting as well. It does beg the question [of] why\u00a0Jakarta\u00a0stocks are so high.”<\/p>\n

Andy Mukherjee says,\u00a0”Yes, Tara. Now Chinese demand is indeed important, and it is indeed slowing \u2013 Chinese demand for commodities, that is \u2013 and\u00a0Indonesia, which is a major exporter of minerals, of palm oil, and coal and other commodities. Now it can’t really rely on domestic consumption, which has supported more than 40% of GDP growth in recent years, because you simply can’t do that for any length of time without investments.<\/p>\n

“And\u00a0India\u00a0is a good case study because\u00a0India\u00a0tried to do just that, and then it floundered. Because what happens is that when you do that, you basically prop up consumption with wage growth running faster than productivity growth, and that’s inflationary. And we do know that, just like in\u00a0India, inflation expectations in\u00a0Indonesia, too, aren’t always well anchored. So improving the investment climate \u2013 I beg your pardon \u2013 is absolutely essential.”<\/p>\n

Don’t Throw All Your Eggs in One Basket<\/strong><\/p>\n

Tara Joseph says, “Well let’s keep an eye on this. Elections [are] coming up in\u00a0Indonesia. It’s one of the hottest emerging stock markets right now, but there are some key issues that investors should beware of.”<\/p>\n

Before adding those few extra pennies into Indonesia’s bucket, wait and consider the possibilities. No signs show that Indonesia is “on the rocks” per se, but there’s also\u00a0<\/em>no proof… in fact, it’s unlikely, that one man can give the Indonesian market the boost its voters so greatly desire. But, by the looks of public sentiment, Joko, the pressure’s on!<\/p>\n

The post Investors Shouldn’t Bet on Indonesia Election<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

Article By WallStreetDaily.com<\/u><\/a><\/p>\n

Original Article: Investors Shouldn\u2019t Bet on Indonesia Election<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com Joko, Joko… He’s our man. If he can’t do it, no one can! Eager voters and investors are looking to the 2014 Indonesia elections as the economy’s saving grace. With hopes for a better economy, optimism is at an all-time high. But before piling\u00a0all of your cash into the market, wait one minute. … <\/p>\n

Continue reading “Investors Shouldn\u2019t Bet on Indonesia Election”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49132","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/49132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=49132"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/49132\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=49132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=49132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=49132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}