Election in 3 Months, Which Stock Investments Have the Potential to Rise? My Money – 10 hours ago

Jakarta, CNBC IndonesiaIt doesn’t feel like there will be a general election in three months. It is predicted that this catalyst will bring blessings to a number of economic sectors, especially consumers and the media.

The chairman of the Indonesian Securities Analysts Association (AAEI) believes that the economy will grow and move positively during the election process. The reason is the effect of the large budget for the presidential, legislative and regional elections, which reached IDR 109.1 trillion.

Historically there are two sectors that usually benefit from every political year entering, including the consumer sector and the media.


Consumer Issuers Benefit from Elections

The consumer sector before the election will usually benefit from the election event. This is because the campaign period will stimulate public consumption. In line with that, the campaign period in the final quarter of this year coincides with the seasonality of Christmas and New Year.

Not only that, the elections in 2024 will be held simultaneously including presidential elections (pilpres), legislative elections (pileg), and regional head elections (pilkada).

It is hoped that this selection from the regional and national levels will be a positive acceleration for consumption demand and overall economic growth. Moreover, household consumption contributes more than 50% to the country’s gross domestic product (GDP).

The large share of household consumption and its prospects for increasing at the end of the year, especially ahead of the election, is also increasingly reflected in the profit growth of several consumer issuers, which always record an increase in income in every political year, starting from the 2009, 2014 and 2019 elections.

From the graph above, it can be seen that there are three issuers that have always recorded an increase in income in the last three elections, namely PT Mayora Indah Tbk (MYOR), PT Indofood CBP Sukses Makmur Tbk (ICBP) and PT Unilever Indonesia Tbk (UNVR). Meanwhile, PT Indofood Sukses Makmur Tbk (INDF) recorded an increase in revenue for the last two election years, whereas in 2009 it actually decreased by around -4.27% on an annual basis (yoy) to IDR 37.14 trillion.

Media Issuers Get Election Blessings

Furthermore, when the election approaches, the media sector will usually receive blessings because of its role as a source of information and means of communication for political party candidates and the public.

Usually media issuers will be needed to image potential leaders. That way, the expected income from potential advertising can increase compared to normal days.

Judging from the income side first, there are two media issuers that will be reviewed, namely PT Media Nusantara Citra Tbk (MNCN) and PT Surya Citra Media Tbk (SCMA). In the past three elections for these two issuers, MNCN has been the media issuer that has always recorded an increase in profits, while in 2009 SCMA’s revenues shrank -6.38% on an annual basis (yoy) but in the two elections after that, revenues were observed to increase.

Even though income increases, it does not always have a positive impact on the bottom line. From the following graph, it can be seen that only MNCN recorded an increase in inline profit with revenue, while SCMA only experienced an increase in the 2009 and 2014 elections, while in the 2019 election it actually recorded a profit decline of -28.75% yoy to IDR 1.05 trillion.

Overall, election sentiment can provide an increase in revenue which also has positive implications for the bottom line or net profit, although not always. This can also be a positive catalyst for share price movements that market players can use to gain profits.

Buy shares while monitoring the news

In stock investment, information regarding central bank policies regarding interest rates, currency exchange rates, and corporate actions of each company listed on the IDX can become sentiment that moves the market.

For this reason, all news in the mass media can influence an investor’s decision to sell or buy shares.

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