For instance, analysts point out that Widodo is adding jobs in major construction projects for unskilled labor, which could stimulate demand for basic consumer goods.
“You need to go mass market as far as tactics go in Indonesia because that’s where Jokowi’s going,” Harry Su, head of research at Bahana Securities, told the Financial Times “Jokowi is heading to provide a lot of support for people in the low end through job creation, through infrastructure projects.”
Moreover, slowing inflationary pressures and speculation of additional interest rate cuts are enticing investors. Bank Indonesia has reduced benchmark rates to 7% from 7.5% earlier this year. However, the lower rates could weigh on the financial sector, which has underperformed.
The financial sector makes up 37.3% of EIDO’s portfolio and 34.0% of IDX’s holdings.
iShares MSCI Indonesia ETF