Jakarta stocks retreat as Jokowi is thwarted

[JAKARTA] Indonesian stocks are tumbling at the fastest pace worldwide as investors lose faith in Joko Widodo's ability to revive South-east Asia's largest economy.

The Jakarta Composite Index has dropped 3.7 per cent since the coalition of parties opposing President-elect Joko, known as Jokowi, succeeded in electing one of their own as parliamentary speaker on Oct 2.

Alan Richardson, whose Samsung Asean Equity Fund beat 96 per cent of peers over the past five years, predicts the gauge may drop 7.6 per cent to 4,800 in October. Foreign funds pulled US$344 million from the shares last week, the biggest outflow this year, exchange data show.

The durability of the so-called Red-White coalition that backed losing presidential candidate Prabowo Subianto will threaten the ability of Mr Joko, who takes office on Oct 20, to implement a policy agenda that includes cutting fuel subsid…