A Top Indonesian Fund Manager Buys Stocks Anticipating a Post-Election Rally

(Bloomberg) -- One of Indonesia’s best-performing fund managers is buying more equities in expectations of a rally in the benchmark Jakarta Composite Index following the nation’s presidential election in mid April.

Jemmy Paul, chief executive officer of PT Sucorinvest Asset Management with 6.6 trillion rupiah ($465 million) in assets, has been buying shares of some banks, PT Telekomunikasi Indonesia and PT Astra International as he expects foreign investors to increase their purchases of Indonesian stocks after the election, when he plans to book profits.

“Whoever wins will have to deal with reality and economic development and growth will continue,” Paul said in a telephone interview.

The Jakarta Composite Index has advanced an average 22 percent in the six months following the past three presidential polls dating back to 2004, outperforming the 12 percent average rise in the MSCI All-Country World Index, according to data compiled by Bloomberg. Still, those gains lag behind the national gauge’s average 24 percent increase in the six months prior to the voting, the data show. The measure has added 10 percent since October 17, well short of the average with less than three weeks to go until the vote.

Paul expects the nation’s stock gauge to gain by at least 5 percent after the vote, with the victor expected to be apparent within hours of polling closing at 1 p.m. Jakarta time on April 17. As well as being CEO, Paul manages the 911 billion rupiah Sucorinvest Equity Fund, which has outperformed 97 percent of its peers over the past five years. He also includes PT Bank Rakyat Indonesia and PT Bank Negara Indonesia among his top picks, along with some construction companies that he didn’t name.

Indonesia’s President Joko Widodo is widely expected to win his second term in a contest with former special forces general Prabowo Subianto, according to surveys.

--With assistance from Natalie Lung.

To contact the reporter on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Thomas Kutty Abraham

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