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Indonesia calls top-level market meeting as wealth fund Danantara says it is ready to buy
After Friday's crash, economy minister Airlangga Hartarto said reforms must show visible progress. Danantara's Rosan Roeslani called cheap shares a long-term opportunity.
Key points
- Airlangga Hartarto said reforms must be implemented and the progress must be visible.
- He announced a meeting of the government, the financial stability committee, OJK, Bank Indonesia and the stock exchange.
- Danantara chief Rosan Roeslani said the fund is ready to enter the market.
Indonesia’s government moved on Friday evening to steady its battered stock market, a few hours after the Jakarta Composite Index suffered its worst fall since 1998 on a proposal by MSCI to demote the country from its emerging-markets group.
Airlangga Hartarto, the Coordinating Minister for Economic Affairs, said the lesson was that “reforms must be implemented, and the progress must be visible”, both to domestic and foreign investors. He announced a high-level meeting of the government, the Financial System Stability Committee, the Financial Services Authority (OJK), Bank Indonesia and the Indonesia Stock Exchange, and urged investors to separate short-term sentiment from the economy’s fundamentals.
Earlier in the day the index had dropped 8.01%, or 469.86 points, to 5,393.92, setting off an automatic 30-minute halt in trading.
The wealth fund steps in
At a press conference at the stock exchange building, Rosan Roeslani, chief executive of Danantara, Indonesia’s investment management agency, said the fund was ready to enter the market. Many listed companies, including state-owned firms, were trading at prices that made them attractive, he said, pointing to banks valued below their book value and to infrastructure and telecom stocks.
“Danantara always views investment as a long-term commitment,” Rosan said. “We must continue to see this as an opportunity. We are optimistic, we believe in it.” He blamed the fall mainly on technical factors, rumours and sentiment rather than weak company balance sheets.
The OJK said it respected MSCI’s decision to consult investors. Its chair, Friderica Widyasari Dewi, said: “We believe the domestic capital market remains prospective and attractive.” MSCI’s consultation runs until 30 April 2027, with a final decision due by 30 June 2027.