Grainne Mccarthy, Jakarta – Market euphoria that Indonesia's historic elections passed peacefully has turned to a nervous waiting game as the snail's pace of the vote feeds anxiety about ballot-rigging.
The strong showing of the ruling Golongan Karya party in the returns thus far is also depressing market sentiment, reinforcing the worries about vote-rigging and raising fears that Golkar could hold on to power, something that would likely unleash massive unrest on the streets.
"Everybody's expecting stability to come back to Indonesia if reformist parties like [Megawati Sukarnoputri's] PDI-P come to power," said Pardi Kendy, head of treasury at PT Bank Buana. "Nobody really expects stability will be regained with Golkar."
Market unease about the vote has grown since unofficial tallies late Wednesday showed Golkar surging into second place, passing out the National Awakening Party of Abdurrahman Wahid, but still behind Megawati's Democratic Party of Struggle.
By early afternoon Thursday, just over 10% of the votes cast have been counted, a fraction of what had been promised by that stage. Based on that count, Megawati's PDI-P party is ahead with about 33.7% of the vote, followed by Golkar with around 20.8% of the total.
Despite the fact that it's still very early days, the surprisingly good showing by Golkar has fed worries that the party could continue to gain ground as vote tallies continue to trickle in from Indonesia's outer islands – with some even worried that Golkar could knock Megawati's PDI-P off the top spot.
"As more counts comes through from rural areas, the numbers coming will boost Golkar's vote," said David Chang, head of research at PT Trimegah Securities in Jakarta. "I think this will be quite negative for investors."
At 0652 GMT Thursday, the Jakarta Composite Index was down 3.3% at 656.50 points. The rupiah was quoted at IDR7,740, slightly higher than its close Wednesday, although market participants said the currency is being helped by rupiah buying by state ban ks.
Because of the mistrust of Golkar – the power base of former President Suharto during his 32-year rule – its strong showing in the vote is driving suspicions that the election count is open to question, or even that Golkar is somehow rigging the vote.
"Golkar's showing second, that's making everybody jittery and suspicious that something might be going on," said Johanna Iskandar, analyst at PT ANZ Panin Securities in Jakarta.
"The market is less optimistic than before and most people are just holding positions now," she said.
Hopes that the elections would mark a major turning point for Indonesia's embattled economy lifted stocks 12.2% Tuesday, boosting Jakarta's main index to almost pre-crisis levels.
The euphoria was driven the way the voting proceeded peacefully and hopes that a strong showing by opposition parties could lead to the formation of a strong, stable government with popular support. That feeling has quickly waned.
"I think the worry is that the slow counting is causing nervousness because there could be some fraudulent accounting, some discrepancies in the vote," said Chang at PT Trimegah Securities.
International observers have warned that lingering delays could erase public trust in Indonesia's fledgling democracy, while perceptions that the vote hasn't been free and fair would also likely hamper the influx of foreign investment that many hoped the election would trigger.
Rudini, head of the General Elections Commission, has blamed the delays on slow and meticulous work by workers processing ballots in tens of thousands of villages.
"I can't say when we will have a final result," said the retired army general and former Cabinet minister who, like many Indonesians, uses one name. "There is no political background to the delays. The election commission has opted for accuracy, not s peed."