Wild stock moves in Indonesia raises the fears of the new investment

(Bloomberg) – It was not supposed to reveal this way. A little more than a year ago, optimism about Indonesia has been rising, as investors expected to expand Prabu Subanto, the policies of former President Joko Widodo Moayad.

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Instead, they are now struggling with changing priorities as the luxury plans assigned to Brabu tend to finance the nation and threaten economic activity. These concerns contributed to a defeat in the country’s shares on Tuesday, which led to the stopping of the first trading since the epidemic and the central bank to defend a rupee.

“People expected the new president to continue in this agenda, and instead they witnessed a move towards a new priority,” said Thia Jameson, Managing Director of Change Investment LLC. “This priority is still specific and clarifying.”

The turmoil added to doubts about the investment of the largest stock market in Southeast Asia, which decreased by 21 % of the September Summit. Tuesday’s work was also fueled by speculation about the resignation of veteran, Sri Moliani Endrawati.

While Indrawati waded the rumors strongly, speculation came in an unstable moment. There are concerns about the validity of public finances in Indonesia, including a budget deficit in the first year and a 20 % decrease in state revenues. The view remains unconfirmed amid the budget allocation plans that are not clear and the lack of new measures to generate revenue.

Investors are now forced to evaluate whether the sale is a sign or sign of the coming things.

The Jakarta Composite index was 1 % higher on Wednesday, as a short sale was erased in the open market. Investors have also received some good news from the country’s securities organizer, which reduced the rules on shares re -purchases for the next six months.

But the stock market in Indonesia is still one of the worst performance in the world, and investors still have worrying questions about approaching the current government.

“It is clear that foreign investors have shook the disturbing signals of Brabu on the allocation of the budget and the ability of the Ministry of Finance to maintain public financial discipline,” said Humin Lee, chief strategic expert in Lombard Odir.

Prabowo sought to transfer money into its priority projects, while reducing spending elsewhere. In addition to Danantara, in addition to the newly launched Danantara, a direct reports line for the president. The fund’s control of companies that make up more than five JCI index neglect fears of political intervention and the risks of transparency.