Danantara Ready to Deploy More Capital Into Indonesian Stocks After MSCI-Triggered Rout
The fund says strong fundamentals and attractive valuations justify continued buying after MSCI’s warning sparked a $82 billion market rout.
- Chief investment officer Pandu Sjahrir said Thursday that Danantara, Indonesia's sovereign wealth fund, will continue purchasing domestic shares deemed attractive despite recent market volatility.
- MSCI's warning last Friday that it might demote Indonesian equities to "standalone" status triggered a massive market sell-off. The potential reclassification stems from concerns over shareholding transparency and market oversight.
- Indonesia's stock market has tumbled about 40 per cent this year, prompting state-owned lenders Bank Mandiri and Bank Negara Indonesia to initiate share buybacks. Danantara sees current risk-reward metrics as favorable for further investment.
- President Prabowo accused MSCI of attempting to intimidate the nation on Wednesday, saying "We have strength, we have courage, we are willing to make sacrifices, and we do not know surrender." Indonesia's Financial Services Authority imposed 2.1 trillion rupiah in fines for share manipulation.
- MSCI's final classification decision is expected by June 2027, with Goldman Sachs estimating a downgrade could prompt US$5.6 billion in passive outflows. If downgraded, Indonesia would join markets like Argentina and Nigeria as a "standalone" entity.
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10 Articles
Danantara claims to have purchased shares on the Indonesia Stock Exchange (IDX) as prices plummeted in recent days. State-owned enterprise stocks with sound fundamentals were the primary criteria.
Danantara Begins Buying Up State-Owned Enterprise Shares on the Indonesia Stock Exchange, Pandu Sjahrir Says Valuations and Investment Prospects Are Attractive
Danantara has begun purchasing shares on the Indonesia Stock Exchange, particularly those of state-owned enterprises (SOEs) deemed to have attractive valuations and promising growth prospects.
REPUBLIKA.CO.ID, JAKARTA — The Daya Anagata Nusantara Investment Management Agency (Danantara Indonesia) has stated its readiness to increase investment in the domestic capital market, assessing that a number of Indonesian company shares, particularly state-owned enterprises...
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