Widodo was declared the winner by The Elections Commission, known as KPU. It said the Jakarta governor had won by more than six percentage points, with 53.15 per cent of the votes cast (Reuters).

In general, investors appear to have been hoping for a Widodo win, as this Jakarta governor is seen as a relatively effective administrator and reformer in a vast region noted for a number of problems including endemic corruption. Polls opened on 9 July. Widodo, who is a businessman, represents the Indonesian Democratic Party of Struggle. Prabowo, who leads the Greater Indonesia Movement Party, or Gerindra, has modelled himself as a strong leader. His reputation has been affected by claims of human rights abuses during his time as a special forces leader in the late 1990s.

Lombard Odier Darier Hensch, the Swiss-based wealth manager house, said that due to various forces, it does not see compelling reasons to add more Indonesian risk assets to portfolios at the moment.

“In fact, it might be ideal to modestly reduce exposure on the news and wait for better reform signals after Widodo’s inauguration in October,” it said.

The bank said that Prabowo appears to assert that any defeat for him will be treated as fraudulent and will file his case at the Constitutional Court, which will then settle the issue by late August. This will make it harder for Widodo to achieve any form of national reconciliation after the inevitable frictions created in the election race.

The note also stated that Widodo’s election team is likely to have to make concessions on reforms to build a stable legislative majority. In April, the election for the People’s Representative Council gave only 37 per cent of the seats to Widodo’s coalition.

A major issue for the country is the fate of its fuel subsidy programme; removing it is arguably the most urgent issue for lawmakers, given the heavy costs for public finances. Fuel prices are politically sensitive, which is why price hikes are often avoided if possible.

With a population of around 240 million, the country continues to suffer from wide inequalities of wealth and high levels of public sector corruption. According to a report on the country by international research firm Transparency International, the country ranks 114th out of 177 on its Corruption Perceptions Index, and ranks 25th out of 28 on a Bribe Payers Index. In other words, its record is poor, but not perhaps as shocking as in other places. The country has a total population of 239.9 million. At the start of July this year, the former top judge of Indonesia's constitutional court was jailed for life for accepting more than $5 million in bribes to influence rulings. Akil Mochtar accepted kickbacks to swing local election disputes. This is the latest in a number of corruption cases.

Indonesia’s growth potential – important from a wealth management point of view – is seen as considerable. A few years ago a report stated that Indonesia’s population of around 37,400 high net worth individuals with a combined wealth of $241 billion (as of 2011) was forecast to grow by 123 per cent, to reach just over 83,500 individuals by 2016.

Other banks building a presence include UBS, ANZ Indonesia, Bank Negara Indonesia (BNI), Bank Mandiri and Standard Chartered. Some of the big Western firms with bases in Singapore, for example, are used as offshore booking points for Indonesian clients.