Sovereign Wealth Funds

Danantara bids for a stake in Indonesia’s stock exchange as it chases $30bn of deals

Indonesia’s sovereign fund has started buying shares, is bidding for the bourse and is courting foreign co-investors, testing how far a stabiliser can go.

UAO Editorial November 1, 2026 4 min read
Office towers and an elevated road lit at night in Jakarta
Photo: N Sopyan / Pexels

Danantara, Indonesia’s sovereign wealth fund, has submitted a bid for a stake in the Indonesia Stock Exchange (IDX) as the bourse prepares to demutualise, the exchange’s chief executive, Jeffrey Hendrik, said on 28 October, according to Reuters. A rule issued in September by the Financial Services Authority (OJK) allows Danantara, the finance ministry and the central bank to hold shares, and caps any single holder at 50%. Hendrik said neither the ministry nor the central bank had bid, and that the exchange remained open to others.

The bid capped a busy week. On 26 October Danantara opened its three-day technology investment forum in Jakarta and signed a memorandum of understanding with three ministries and the research agency BRIN, without disclosing figures. Its chief technology officer, Sigit Puji Santosa, outlined a pipeline of more than 40 industrial projects and said reaching $20bn-30bn of industrial investment within two to three years would be excellent, though the fund aims for more. It is targeting $30bn of co-investment deals across Asia at its New Asia Forum in Bali on 3-4 December, according to Danantara and Asia Asset Management, and Pandu Sjahrir, its chief investment officer, said the fund would act as “an anchor investor capable of attracting high-quality capital into Indonesia”.

A stabilising buyer in a falling market

Jakarta’s main index was down about 40% this year by 28 October, the world’s worst-performing equity market, Reuters reported. On 15 October MSCI launched a consultation on reclassifying Indonesia from emerging-market to standalone status, citing market participants’ concerns about “persistent opacity in shareholding structures and suspected coordinated trading behavior”. It will take feedback until 30 April 2027 and decide by 30 June 2027. The next day Danantara’s chief executive, Rosan Roeslani, said the fund was “ready to enter the market”. Sjahrir had told Fortune on 12 October that Danantara planned to invest $5bn in Indonesian businesses over the next six to nine months. During an earlier rout in February it began buying shares, with about $7bn earmarked for equities, according to Investortrust. Kontan reported on 24 October that Sjahrir said it had begun buying shares on the IDX in the previous two days.

Governance questions for a stabilising sovereign fund

State funds buying in a panic is not new, but Danantara is stacking roles. Its asset-management arm supervises more than 1,000 state-owned enterprises. It buys listed shares. It has now bid for a stake in the self-regulating exchange on which its listed state companies trade. And it is pitching itself to foreign capital as an anchor co-investor. Its chief executive is also Indonesia’s minister of investment. Each role can be defended on its own. Together they raise questions about price discovery, market oversight and related-party dealing, close to the concerns market participants raised with MSCI.

For foreign sovereign funds and pension plans weighing the Bali pipeline, the practical issue is alignment. “The idea is to create economic value, and not necessarily commercial value first,” Sjahrir told Fortune. Co-investors with return-seeking mandates will want clarity on how projects are selected and priced, how exits work in a market facing demotion, and who bears losses when national objectives and investor returns diverge. A downgrade would also remove Indonesian stocks from MSCI’s emerging and frontier-market indices, Fortune noted.

There is a case on the other side. Demutualisation has been required by law since 2023, and the authorities say it should improve governance and bring the exchange into line with regional peers. Regulators have introduced disclosure of shareholdings above 1%, finer investor classification and a roadmap to a 15% minimum free float. A patient domestic buyer can also damp forced selling when an index provider threatens to cut a market’s status. Rosan has argued that the pressure reflects technical factors, rumours and non-fundamental sentiment rather than weak company balance sheets.

What to watch

  • 11 November: MSCI announces its regular November index changes, effective 1 December; its freeze on certain index changes for Indonesian securities remains.
  • 3-4 December: the New Asia Forum in Bali, and whether the $30bn target becomes signed commitments with named partners.
  • The IDX decision: whether rival bidders emerge, and how large a stake Danantara secures before a later initial public offering.
  • 30 April and 30 June 2027: the close of MSCI’s consultation and the deadline for its final decision.

Sources

Sovereign Wealth FundsEmerging MarketsCapital Markets
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