Latest news with #PanduSjahrir
The Star
25-04-2025
- Business
- The Star
Indonesian sovereign wealth fund entry into capital market raises long-term risks
JAKARTA: Danantara's planned entry into the domestic capital market is expected to significantly help stabilise 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 per cent 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. He also said Danantara should consider extending its role as a long-term institutional investor in the market, citing attractive return prospects in the future. 'Government-backed institutions in other countries have taken similar steps, even Japan's central bank invests in equities,' he told The Jakarta Post on Tuesday (April 22). On April 7, China intervened to support domestic stocks plunging on US tariff woes, with a sovereign wealth fund increasing its holdings in equities and saying it would defend market stability, Reuters reported. To manage risk, he recommended that Danantara diversify beyond its current holdings in SOEs' shares and consider investing in privately owned, publicly listed companies. 'They could look into sectors aligned with government programs, such as the free nutritious meal program, where profits from these firms would eventually flow back to Danantara in the form of dividends,' he added. Felix Darmawan, an economist at Panin Sekuritas, agreed that Danantara's active presence in the capital market could help stabilise share prices of publicly listed SOEs amid a bearish trend fueled by sustained foreign capital outflows. He noted that the fund's support should not be limited to banking stocks, which have an outsized influence on the IDX Composite, but should also extend to commodities such as gold and coal, as well as the construction sector. '[Still,] if Danantara wants to maintain investor confidence, especially from foreign investors, it must also push for greater transparency, stronger governance and better management within SOEs, not just intervene in the market,' Felix told Kontan on Tuesday. Both the IDX and the Financial Services Authority have welcomed Danantara's entry into the market, calling it a timely move to reinforce investor confidence and market resilience. Following the announcement of Danantara's plan, the IDX Composite continued its upward momentum, climbing 6.6 per cent to close at 6,634.4 on Wednesday, despite no official confirmation that the fund had already begun intervening in the market. Frederic Neumann, chief Asia economist at HSBC, acknowledged that short-term market interventions by government agencies can provide temporary relief for equity markets. However, he expressed skepticism about their long-term effectiveness. 'As an economist, I'd say that no matter the resources at your disposal, channeling them into strengthening growth fundamentals tends to yield better long-term outcomes,' Neumann told the Post on Tuesday. 'Indonesia has tremendous growth potential, and as long as the fundamentals are sound, the market should be able to correct itself.' In response to external pressures, such as US' blanket tariffs, Neumann urged the government to use its fiscal resources on investments that support sustainable economic growth as well as introducing deregulation and pro-business policies. Rully Wisnubroto, senior economist at Mirae Asset Sekuritas Indonesia, acknowledged that market intervention could be 'understandable' in the short term to stabilise prices and ease investor anxiety. However, he cautioned that such measures should not become a long-term strategy. He also flagged potential risks for Danantara to enter the market during a period of heightened volatility. "Frankly, I don't agree with using SOE dividends [collected by Danantara] to support market liquidity," Rully said during a press conference on April 17. "Those funds were meant to drive economic growth [through productive investments], as originally promised." - The Jakarta Post/ANN
Yahoo
29-03-2025
- Business
- Yahoo
Indonesia Wealth Fund Danantara CIO on Investor Concern
Pandu Sjahrir, Chief Investment Officer of Daya Anagata Nusantara, speaks exclusively to Bloomberg Television about the Indonesian sovereign wealth fund's ambitions and operations. The fund, known as Danantara, has a direct reporting line to President Prabowo Subianto. Investors have sought clarity about its corporate structure, as worries about Prabowo's policies spark a wider selloff of Indonesian equities. Sjahrir speaks to Haslinda Amin about Danantara's team, the concerns around transparency, and what he considers to be the long-term successful outcome for the fund. (Corrects spelling of name in last sentence.) Sign in to access your portfolio
Bloomberg
28-03-2025
- Business
- Bloomberg
Indonesia Wealth Fund Danantara CIO on Investor Concern
Pandu Sjahrir, Chief Investment Officer of Daya Anagata Nusantara, speaks exclusively to Bloomberg Television about the Indonesian sovereign wealth fund's ambitions and operations. The fund, known as Danantara, has a direct reporting line to President Prabowo Subianto. Investors have sought clarity about its corporate structure, as worries about Prabowo's policies spark a wider selloff of Indonesian equities. Siahrir speaks to Haslinda Amin about Danantara's team, the concerns around transparency, and what he considers to be the long-term successful outcome for the fund. (Source: Bloomberg)
Zawya
28-02-2025
- Business
- Zawya
Indonesia's new sovereign fund will run with commercial mindset, official says
JAKARTA - New sovereign wealth fund Danantara Indonesia will focus on large-scale projects generating good returns as it prioritises sectors championed by the government to increase economic growth and create jobs, its chief investment officer told Reuters. Danantara, which was launched this week and is slated to eventually manage more than $900 billion worth of assets including government stakes in state firms, has been described by officials as Indonesia's version of Singapore's Temasek fund. "All the money that goes to Danantara will be used commercially and productively to generate economic activities," chief investment officer Pandu Sjahrir told Reuters on Friday, adding the fund was not restricted to investing in state firms or projects. President Prabowo Subianto has pledged $20 billion for Danantara's "first wave of investment" that will target projects in natural resources processing, artificial intelligence development, and energy and food security. The initial capital will come from the government and dividend payments from the state company stakes that it will hold. In 2025, Jakarta has said it expects dividends from state-owned enterprises of 90 trillion rupiah ($5.4 billion). "We will be deliberate, slow, and most likely be boring in our investment activities. Because our job really is to find good returns," Pandu said, noting risk management would be paramount given the public scrutiny the fund will face. The government has pledged transparency, saying the fund could be audited anytime. The company is still in a discovery stage for its cost of capital, Pandu said, and would be looking at projects with minimum acceptable rate of return close to those on Indonesian government bonds. In its first year, Danantara will focus on domestic investment, including in private equity and debt markets, and will be open to offshore investment after that. Danantara's size means it will look to invest in projects worth $1 billion or more, with investment decisions based on the returns and the ability to create high-value jobs, he said. A number of investors have already approached Danantara for potential partnership, including large funds from the United States, Middle East, North Asia and Southeast Asia, Pandu said. Unlike Jakarta's existing sovereign fund, the Indonesia Investment Authority, Danantara is not required to have partners for its investment projects, Pandu said. Fitch Ratings said on Monday in its report the credit profile of some state-controlled firms could weaken if Danantara requires higher dividend payouts or if they were pursuing riskier projects as a result of Danantara's approach.
Reuters
28-02-2025
- Business
- Reuters
Indonesia's new sovereign fund will run with commercial mindset, official says
JAKARTA, Feb 28 (Reuters) - New sovereign wealth fund Danantara Indonesia will focus on large-scale projects generating good returns as it prioritises sectors championed by the government to increase economic growth and create jobs, its chief investment officer told Reuters. Danantara, which was launched this week and is slated to eventually manage more than $900 billion worth of assets including government stakes in state firms, has been described by officials as Indonesia's version of Singapore's Temasek fund. "All the money that goes to Danantara will be used commercially and productively to generate economic activities," chief investment officer Pandu Sjahrir told Reuters on Friday, adding the fund was not restricted to investing in state firms or projects. President Prabowo Subianto has pledged $20 billion for Danantara's "first wave of investment" that will target projects in natural resources processing, artificial intelligence development, and energy and food security. The initial capital will come from the government and dividend payments from the state company stakes that it will hold. In 2025, Jakarta has said it expects dividends from state-owned enterprises of 90 trillion rupiah ($5.4 billion). "We will be deliberate, slow, and most likely be boring in our investment activities. Because our job really is to find good returns," Pandu said, noting risk management would be paramount given the public scrutiny the fund will face. The government has pledged transparency, saying the fund could be audited anytime. The company is still in a discovery stage for its cost of capital, Pandu said, and would be looking at projects with minimum acceptable rate of return close to those on Indonesian government bonds. In its first year, Danantara will focus on domestic investment, including in private equity and debt markets, and will be open to offshore investment after that. Danantara's size means it will look to invest in projects worth $1 billion or more, with investment decisions based on the returns and the ability to create high-value jobs, he said. A number of investors have already approached Danantara for potential partnership, including large funds from the United States, Middle East, North Asia and Southeast Asia, Pandu said. Unlike Jakarta's existing sovereign fund, the Indonesia Investment Authority, Danantara is not required to have partners for its investment projects, Pandu said. Fitch Ratings said on Monday in its report the credit profile of some state-controlled firms could weaken if Danantara requires higher dividend payouts or if they were pursuing riskier projects as a result of Danantara's approach.
