Business · Markets · 21 hrs ago
Danantara sets aside up to $1 billion for Indonesian market investments
Danantara, Indonesia’s state investment fund, plans to invest up to $1 billion in the domestic capital market by the end of 2026.
It says it may buy shares if the market faces a crisis driven by temporary external pressures.
The fund is prepared to consider stepping in if MSCI downgrades Indonesia’s market classification next month, a move that could put more pressure on shares.
Indonesia is currently classified as an emerging market, and the potential downgrade would move it to frontier-market status.
Danantara says it would carefully assess any purchases and look for value rather than aim simply to stabilize the market.
It is also cautious about investing in artificial intelligence companies because it considers its exposure to the sector relatively late.
The fund has not made a final decision to intervene, and says it is still discussing whether it can retain dividends that had been expected to go to the government this year.
Danantara has set aside up to US$1 billion for investments in Indonesia’s domestic capital market through the end of 2026.
The state investment agency may buy assets if a market crisis is driven by temporary external sentiment, but says it will first conduct due diligence.
The move comes as Indonesia’s stock market faces the risk of a downgrade by MSCI next month.
Danantara has already allocated about US$3 billion for investments in domestic and foreign stocks and bonds.
Investment chief Rani Piputri said the agency is cautious about investing in artificial intelligence-related stocks.
- Who
- Danantara, Indonesia’s state investment agency, and its public investment chief, Rani Piputri.
- What
- Danantara has set aside up to US$1 billion for domestic market investments through the end of 2026. It may intervene during a market crisis after due diligence.
- When
- The allocation runs through the end of 2026. The agency could intervene if MSCI downgrades Indonesia’s market next month.
- Where
- Indonesia’s domestic capital market.
- Why
- Danantara may act if it judges a market crisis to be caused by temporary external sentiment.
This story does not have two clearly opposing sides.
If there is a crisis in the market, and we feel that it is only based on temporary external sentiment... then we might step in.
We might step in. Maybe... but there is a lot of due diligence we have to do.
We do not think AI is a bubble and we do not think it will burst, but we just want to be careful entering this area because we are somewhat late.
Danantara began allocating funds to invest in the domestic capital market.
Danantara continued investing while the stock index was under pressure after an MSCI warning raised the possibility of Indonesia being downgraded from emerging-market to frontier-market status.
Danantara public investment chief Rani Piputri said the agency might intervene if a market crisis reflected temporary external sentiment.
MSCI may downgrade Indonesia’s capital market classification, according to the article.
Danantara’s investment allocation for the domestic capital market is intended to run through this point.
- Domestic market allocation
- Up to US$1 billion
- Allocation period
- Through the end of 2026
- Existing investment allocation
- About US$3 billion in domestic and foreign stocks and bonds
- Assets managed
- About US$900 billion across more than 1,000 companies
- Danantara portfolio
- 65% stocks, 30% fixed-income instruments, 5% hedge funds
Sources
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