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Danantara’s entry into capital market raises long-term risks
The move came after the country’s stock market and currency emerged as one of Asia’s worst-performing this year amid uncertainties due to the US' wide-sweeping tariffs and concerns over the country’s fiscal policy.
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Meet the team: Danantara's chief investment officer Pandu Sjahrir (left), CEO Rosan Roeslani (middle) and chief operating officer Dony Oskaria (right) join hands for a photo on March 24 at the management team announcement in Jakarta. (JP/Deni Ghifari)
D
anantara’s planned entry into the domestic capital market is expected to significantly help stabilize the local stocks and bonds market, especially at times of volatility, but some have also warned that the move could disrupt the sovereign wealth fund’s (SWF) focus on its much needed long-term projects for the economy.
The move comes after the country’s stock market and currency emerged as one of Asia’s worst-performing this year amid uncertainties due to the United States’ wide-sweeping tariffs and concerns over the country’s fiscal policy.
The IDX composite, the country’s benchmark, fell to its lowest level of the year at 5,968 points on April 9, the second trading day after the announcement, marking a 15.9 percent drop from its position at the start of 2025.
Meanwhile, the rupiah momentarily hit around Rp 17,000 per US dollar on April 7, as it extended depreciation against the greenback since the beginning of the year.
Danantara’s chief investment officer Pandu Sjahrir said on April 14 that the fund was ready to act as a “liquidity provider” for the domestic capital market. He noted that dividends from state-owned enterprises (SOEs), a key source of the fund’s capital, are expected to start flowing later this April.
He vowed to be careful in the placement of funds, saying “what’s important is the return”, while ensuring the fund would start weighing investment in real strategic projects.
Fikri C. Permana, an economist at local brokerage KB Valbury Sekuritas, said Danantara’s intervention could serve as a positive sentiment for the IDX. He likened the fund’s potential role to that of the Workers Social Security Agency (BPJS Ketenagakerjaan), which had limited activity in the stock market due to underwhelming returns from its existing investments.
