Morning Briefing: Baswedan Not Joining Opposition Ranks in 2019 Presidential Election

The Jakarta Composite Index fell by 0.36 percent to 6,250.26 and hit its week-lowest, along with Rupiah that weakened by 0.23 percent in the middle of Prabowo Subianto' lawsuit at the Constitutional Court - Photo: Special

JAKARTA (TheInsiderStories) – Good Morning. Politics is the highlight of yesterday’s (August 23) news. First come from the Jakarta Governor Anies Baswedan, who will not take formal role in the opposition’s campaign team for the 2019 Presidential Election.

That despite the governor, who has no official party affiliation, won the Jakarta seat through supports from the opposition camp in a fiercely contested election in 2017.

To date, there’s still no clarity on whether the opposition made an offer which was refused by Baswedan or even there’s any offer at all. But, it could set a stage for 2024.

For one, it gives him some distance from the opposition camp, whose alliance has been shaky since the beginning. This will help if Baswedan harbors some political ambition beyond Jakarta and needs to cozy up with the ruling coalition, which has no visible realistic successor after President Joko Widodo.

Consequently, the move also gives the opposition, led by the Gerindra Party, some distance from Baswedan, one of the potential candidate in 2024 presidential election, and instead test one of its rising star, Vice President candidate billionaire Sandiaga Uno, at the national stage with an eye for 2024.

Gerindra had shot down the ascension of another of rising star, Agus Harimurti Yudhoyono from the Democratic Party, by refusing him the vice president candidacy.

Second is Zulkifli Hasan, the chairman of the People’s Consultative Assembly, relentless attack against Finance Minister Sri Mulyani Indrawati, who already resigned from a formal role in Widodo’s re-election team after public criticism.

It started from Hasan’s statement on debts, which was responded by Indrawati. While the debate itself is futile and somewhat petty, it shows that the minister, despite her academics and global credentials, still has a lot to learn on the dynamics of Indonesian politics.

From the economy, the biggest talk was the delay of the Initial Public Offering of Saudi’s oil and gas giant Aramco, which is slated to be the world’s largest. Official statement said the IPO plan is still on the table but does not disclose a clear timeline. That, in itself, shows a lack of confidence on the equity market amid the return of volatility.

Another is the release of US Federal Reserve’s (the Fed) minutes of meeting, which market participants considered as hawkish. The world’s most influential central bank is expected to raise its reference rate in September, making it the third for 2018.

The Fed’s hawkish tone created volatility for rupiah. The local currency dropped to 14,620 per US$1 on Thursday from 14,568. The Jakarta Composite Index, however, rose 0.7 per cent to 5,983 with foreign investors net bought stocks worth Rp549 billion.

The equity market’s movement might be influenced by optimism on the government’s B20 policy, that is to blend diesel fuel with 20 per cent of palm oil-based component. As the government look to expand the program to non-subsidized diesel fuel, details emerged that the government will impose tough sanctions those who refuse to comply.

Though the primary aim is to reduce imports of oil, which will ultimately reduce some volatility for the rupiah, it gives a support to the price of palm oil, which Indonesia is the world’s largest producer and exporter.

May you have a profitable day.

TIS Intelligence Team, Email: theinsiderstories@gmail.com