JAKARTA — Indonesian stocks rallied on Thursday after most unofficial tallies showed Jakarta governor Joko Widodo ahead of ex-general Prabowo Subianto in a closely fought race to lead Southeast Asia's biggest economy.
Both candidates declared victory Wednesday in the tightest and most divisive presidential election since the downfall of dictator Suharto in 1998.
However the polling agencies considered most reliable indicated a Widodo win, and the Jakarta benchmark index surged more than 2.5 per cent at the open.
Official results are not expected until July 22.
Investors have been hoping for victory for the Jakarta governor, the first serious presidential contender without deep roots in the Suharto era, seeing him as a potential reformer and clean leader in a graft-ridden country.
Prabowo's speeches on the campaign trail have been marked by fiercely nationalistic rhetoric and pledges to further squeeze foreign companies operating in Indonesia.
While Widodo also adopted a more nationalistic tone during campaigning, Bank of America Merrill Lynch said he was seen as more market-friendly and open to foreign investment than Prabowo.
"Investors were unnerved over the past two months by Prabowo's rising popularity," said the bank, according to Dow Jones Newswires.
Widodo was far ahead in the polls several months ago, but his lead shrank dramatically before election day in the face of a well-run campaign by Prabowo and a flood of negative attacks.
However, despite the initial market euphoria, concerns are also growing about a long period of uncertainty, which could unnerve investors.
Official results are around two weeks away. Even if Widodo is then declared the winner, Prabowo can still challenge the result in the Constitutional Court, potentially dragging out the process for weeks.
Amid worries that the closely fought race could cause unrest, President Susilo Bambang Yudhoyono last night met both candidates at his official residence outside Jakarta and urged them to wait until the official results before holding major celebrations.
"We call on all party members and volunteers not to organise a parade, it's better just to give thankful prayers," Widodo said late Wednesday after meeting the president.
Nevertheless the euphoria among his camp was clear. — AFP