REPUBLIKA.CO.ID, JAKARTA - Indonesian shares rose on Friday amid bargain hunting in battered large caps as investors weighed political uncertainties after an unconvincing election win by the main opposition party.
After Thursday's sell-off that wiped more than 3 percent off the Jakarta Composite Index, some investors selectively bought shares of blue chip firms. The benchmark was up 0.4 percent at midday, heading for a weekly fall of 1.5 percent after two consecutive weeks of gains.
"We are likely to see more foreign selling today. It is time to buy on weakness ... We suggest investors buy stocks with nearer-term catalysts such as good first quarter result," strategists at Trimegah Securities wrote in a report.
Shares of Bank Rakyat Indonesia, Bank Mandiri and Astra International rebounded from oversold conditions the previous session. Shares of agribusinses firm Wahana Pronatural and marine port services company Tanah Laut, which surged 17.5 percent and 10 percent, respectively, were the top two boosts on the index after their losses on Thursday.
Initial results showed the Indonesian Democratic Party of Struggle (PDIP) won just less than 20 percent of the votes in the parliamentary election, the biggest of any party but below a threshold needed to nominate its own presidential candidate. This will likely force it to find allies to back its candidate, Jakarta governor Joko "Jokowi" Widodo, in a July vote for president of Southeast Asia's biggest economy.
The formal result of the legislative election will not be announced until early May, a little before the May 10 deadline for parties to nominate their candidates for the presidency. Analysts said the presidential vote could be forced to go into a second round.
"He's probably still going to win the presidential election, but he'll have less freedom to choose his running mate. There's a high possibility of coalition allies," said a Singapore-based trader.
The rupiah fell nearly 1 percent to 11,460 per USD, its weakest since March 12, on selling from foreign and local banks, while importers bought dollars for payments.
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