SE Asia Stocks-Indonesia shares down over 3 pct on election disappointment
April 10 (Reuters) - Indonesian stocks fell over 3 percent on Thursday after parliamentary election results signalled possible formation of a weak government that will have limited ability to push for reforms needed to boost investments in the Southeast Asia's largest economy. Early counts by pollsters showed the main opposition Indonesian Democratic Party-Struggle (PDI-P) failed to win enough votes to nominate popular Jakarta governor Joko "Jokowi" Widodo for the powerful presidency. Investor enthusiasm for Indonesia had been on the rise on the belief that Jokowi might even win enough votes to avoid having to go to a run-off in three months time. Jakarta Composite Index was down 3.2 percent at 4,764.66 by midday, its worst performance in a day since Aug. 27, 2013. Investors have expected PDI-P to secure adequate vote to nominate Jokowi to the July presidential polls and disappointing outcome could raise concern that the country could run into a period of political confusion. The fall was across the board, led by financials with Bank Mandiri and Bank Rakyat Indonesia falling 5.6 percent and 4.9 percent, respectively. Bank Mandiri and Bank Rakyat Indonesia have jumped 10.2 percent and 9.1 percent since March 14 after the opposition announced Jakowi's candidacy. "With larger-than-expected coalition required by PDI-P, we see possible formation of a weak government with limited ability to push through necessary reforms and policies ahead," said Jakarta-based Harry Su, head of research of Bahana Securities. Su in a note advised investors to take profit on sectors which have appreciated the most like infrastructure, property and banks in the lead up to the parliamentary elections, with plenty of political uncertainty ahead. "Nevertheless, with plenty of election spending/money politics, we expect domestic consumption to be well supported. With that said, we advise investors to rotate into consumer staples and telcos, which should outperform in a potential market correction ahead due to their defensive nature." The Indonesian rupiah, the best performing Asian currency so far this year, also fell 0.6 percent to 11,350 per dollar as of 0445 GMT as foreign and local banks took profits after the poll results. Other Southeast Asian markets were range bounded as positive sentiment on the minutes of the Federal Reserve's latest policy meeting that suggested the Fed may be more cautious towards raising interest rates than markets had thought was offset by an unexpected fall in Chinese exports in March. Thailand was up 0.3 percent and the Philippines traded 0.6 percent firmer, while Singapore and Vietnam were down 0.4 percent and 0.2 percent respectively. For Asian Companies, click For South East Asia Hot Stock reports, click SOUTHEAST ASIAN STOCK MARKETS Change at 0552 GMT Market Current Prev Close Pct Move TR SE Asia Index* 416.80 418.94 +0.51 Singapore 3198.64 3209.92 -0.35 Kuala Lumpur 1856.48 1855.75 +0.04 Bangkok 1386.58 1382.02 +0.33 Jakarta 4764.66 4921.40 -3.18 Manila 6629.29 6587.49 +0.63 Ho Chi Minh 602.04 603.25 -0.20 (Reporting by Shihar Aneez in Colombo and Viparat Jantraprap in Bangkok; Editing by Anand Basu)
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