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Jakarta, Oktober 12, 2026 – Indonesia’s sovereign wealth fund, Danantara, is preparing a bold counter cyclical move, setting aside Rp 17.89 trillion (around $1 billion) to buy equities as the Jakarta Composite Index (IHSG) suffers one of the worst performances globally this year.
The announcement is intended to calm investor fears of a prolonged sell off and to signal confidence in the country’s long‑term fundamentals.
Danantara Investment Management, which oversees the fund’s public portfolio, confirmed that the allocation will be deployed before year end.
The fund already holds roughly $3 billion (Rp 53.67 trillion) in stocks and bonds across domestic and international markets.
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Recent investments include $250 million (Rp 4.47 trillion) in U.S. oil and gas firm HighPeak Energy, alongside early positions in artificial intelligence ventures, underscoring a diversification strategy beyond traditional commodities.
The timing of this intervention is critical. The IHSG has ranked among the weakest indices worldwide in 2026, reflecting heavy capital outflows and fragile sentiment.
Analysts warn that Indonesia faces a potential downgrade in market classification by MSCI in November, a move that could trigger further foreign withdrawals.
Against this backdrop, Danantara’s readiness to buy during downturns is being closely watched as a stabilizing force.
Rani Piputri, Head of Public Investment at Danantara, emphasized that the fund’s approach is not speculative but strategic.
“If a crisis occurs and we assess it is driven only by temporary external sentiment, we may enter the market,” she said.
The statement highlights the fund’s intent to capture long term value rather than chase short term gains.
For domestic markets, the planned purchases could support valuations of blue chip stocks and prevent panic driven collapses.
More broadly, the move signals the government’s willingness to deploy sovereign wealth resources as a buffer against external shocks, a tactic reminiscent of Norway’s and Singapore’s funds that often buy assets during downturns.
Still, risks remain. Entering too early could expose Danantara to further losses if MSCI downgrades materialize.
Heavy exposure to energy and AI sectors may also limit diversification, while global volatility rising U.S. interest rates and geopolitical tensions could prolong capital flight from emerging markets.
Yet the outlook remains cautiously optimistic.
If executed prudently, the Rp 17.89 trillion injection could stabilize Indonesia’s capital markets and demonstrate resilience amid global uncertainty.
For investors, Danantara’s intervention may serve as both reassurance and a reminder that sovereign wealth funds can play a decisive role in cushioning economies during turbulence.
