JAKARTA (TheInsiderStories) – Good Morning. Expect politics to dominate the news streams in the next few days as lobbying for the Vice President seat is intensifying as deadline to register for 2019 Presidential Election nears.
The opposition may encounter more difficulties than the ruling coalition. On Tuesday (07/08), Prabowo Subianto, the presumed presidential candidate from the ruling coalition, held meetings with his key supporters, including with former President Susilo Bambang Yudhoyono or SBY who recently pushed his Demokrat Party to join the opposition.
The meeting, however, failed to reach an agreement on who will become Subianto in challenging the incumbent President Joko Widodo next year, who appears to enjoy high popularity rating.
Subiano may prefer SBY’s heir-apparent Agus Harimurti Yudhoyono (AHY) as his running mate, who is relatively a novice in politics but has the full backing of the political machine of the Demokrat. However, choosing AHY may create dissent among Subianto’s supporters, notably from the Keadilan Sejahtera Party, which had been with him since the last election in 2014 and thinks that it deserves the vice president candidacy.
Things are more settled from the camp of Widodo, who is not only enjoying high popularity but also a full support from his coalition on whoever he chooses to become the running mate. There’s a high possibility that Widodo running mate will be his vice president Jusuf Kalla, who is currently challenging a law provision that bars him from running for the seat for the third time at the Constitutional Court.
The challenge puts the highly influential Constitutional Court under the spotlight. The Court is now under pressure to deliver its verdict on Friday, which is the registration deadline.
Pairing with Kalla again may give Widodo a better chance to win. The incumbent president, however, has a wealth of option of vice presidential candidates at his disposal, which is a reward for a high popularity rating.
As election draws near, the business community pulls back over fearing to take political risk. Thomas Lembong, the chairman of the investment coordinating board, said the growth of investment, or officially known as gross fixed capital investment, is typically lower during the election cycle.
That explained why growth in gross fixed capital formation was only 5.87 percent in the second quarter, significantly lower that close to 8 percent in the first quarter. Lembong said ‘wait-and-see’ is one of the default mode for investors, both domestic and international, during the election cycle.
The positive sentiment from the better-than-expected economic growth in second quarter was short-lived as market participants’ focus shifted back to the escalating trade war.
The Jakarta Composite Index was down 0.16 per cent to end at 6091.25 while the rupiah weakened slightly at 14,485 per U.S dollar versus 14,481 per U.S dollar yesterday.
Hope you have a profitable day.
TIS Intelligence Team, Email: email@example.com