Indonesia’s Danantara pledges $5 billion to home-grown companies as MSCI once again threatens a downgrade
Chief investment officer Pandu Sjahrir says consumer stocks are cheap; MSCI's proposed standalone reclassification threatens to deepen the sell-off.
Indonesia's sovereign wealth fund, Danantara, has pledged $5 billion to locally owned companies over the next six to nine months, according to its chief investment officer, Pandu Sjahrir. This commitment was made before MSCI proposed downgrading Indonesia to standalone status, which has caused the Jakarta Composite Index to drop 11.6%.
Sjahrir urged his team to focus on Indonesian business fundamentals, which have been growing healthily, as buyers of these companies. The sovereign wealth fund, established by President Prabowo Subianto in 2025, aims to stabilize the country's stock market, which is currently under scrutiny from global index providers like MSCI.
MSCI's proposal to downgrade Indonesia from emerging-market to standalone status would remove Indonesian stocks from MSCI's emerging and frontier-market indices, potentially prompting investment funds to reduce their exposure to the country. Indonesia has until April 2027 to implement reforms.
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