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Indonesia's surprise election result unsettles investors

Published on Apr 10, 2014 12:13 PM
 
Jakarta governor and PDI-P presidential candidate Joko Widodo during a press conference in Jakarta, Indonesia, on 9 April 2014. An unexpectedly weak election result for the party behind the frontrunner to be Indonesia's next president hurt stocks and the currency on Thursday, April 10, 2014, with concern Southeast Asia's biggest economy could be heading into a period of political confusion. -- ST PHOTO: KEVIN LIM CP

JAKARTA (Reuters) - An unexpectedly weak election result for the party behind the frontrunner to be Indonesia's next president hurt stocks and the currency on Thursday, with concern Southeast Asia's biggest economy could be heading into a period of political confusion.

Early returns from Wednesday's parliamentary election show that the Indonesian Democratic Party-Struggle (PDI-P) will have no choice but to cut a deal with other parties to nominate its hugely popular candidate for president in a July 9 poll.

Investor enthusiasm for Indonesia had been on the rise on the belief that Jakarta governor Joko Widodo might even win enough votes to avoid having to go to a run-off in three months time.

"At the very least, expectations on the duration of the presidential election is likely to move from one to two rounds, which increases the period of uncertainty," Trimegah Securities wrote in a research note. Indonesian shares fell 3 per cent.

 
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