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Market indifferent about cabinet changes as global factors dominate
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An electronic board shows stock prices of the Indonesian Composite index at the Indonesia Stock Exchange in Jakarta on Sept. 10, 2020. (JP/Seto Wardhana)
T
he market has shown little to no reaction to the appointment of three new deputy ministers under President Joko “Jokowi” Widodo, two of which have close ties with president-elect Prabowo Subianto, as global circumstances play a more commanding role for traders.
Both the Indonesia Stock Exchange (IDX) Composite index and the rupiah exchange rate weakened in the day following the inauguration of the three new high government officials, but economists attributed the changes chiefly to international developments.
The IDX Composite, the key gauge of stocks listed on the Jakarta-based bourse, dropped 0.36 percent to a reading of 7,294 on Friday.
The Indonesian currency weakened about 0.1 percent day-to-day to trade near Rp 16,200 per United States dollar on Friday late afternoon, but that was in line with other currencies around the world that also depreciated slightly against the greenback.
David Sumual, chief economist at private lender BCA, told The Jakarta Post on Friday that the IDX Composite’s descend was not brought about by domestic politics, “since all are down in the regional market”.
On Friday, Japan’s Nikkei 225 came down by around 0.1 percent and Singapore’s Straits Times Index shed 0.7 percent. The Hang Seng index had a harder time as it dropped by 2 percent.
“I think the trend is, according to my observation, the global economy is showing an indication of weakening,” noted David.
