Flooring Guide by Cinvex – JAKARTA – Danantara Indonesia, the Investment Management Institution (BPI), has declared its firm commitment to deepening the national capital market, with a particular focus on equity instruments. The management team has meticulously outlined the specific criteria Danantara will employ when selecting stocks for its investment portfolio.
Ali Setiawan, Managing Director of Treasury Danantara, emphatically stated that the institution will avoid speculative “gorengan” stocks—a term for shares experiencing extraordinary price improvement (PI) or overly aggressive surges. “We will rigorously assess every potential stock against our established criteria. This involves a comprehensive examination of its return on equity (ROE), price improvement (PI), dividend yield, market capitalization, profitability, and daily liquidity,” Ali explained from Wisma Danantara, Jakarta, on Friday, November 28, 2025.
Transitioning to fixed-income instruments, Ali affirmed Danantara’s strategic preference for government bonds (SBN), with the majority intended to be held until maturity. The institution will specifically target highly liquid SBN series, which are typically the newly issued bonds by the state. Should Danantara consider acquiring “off-the-run” series—older SBNs that no longer serve as market benchmarks—they would carefully evaluate whether such bonds offer attractive compensation in the form of a higher yield.
Furthermore, in its pursuit of robust risk-adjusted returns and a diversified risk strategy, Danantara Indonesia recognizes the imperative to allocate investments in international capital markets. This approach, Ali highlighted, is a common and established practice among leading global sovereign wealth funds.
“Confining asset classes solely to Indonesia can be quite limiting. What options are truly available? Primarily fixed income, corporate bonds, and government bonds, with corporate bonds often lacking sufficient liquidity,” he elaborated on the existing constraints within the domestic market.
Ali also addressed the potential collaboration between Danantara and the Indonesia Stock Exchange (IDX) to create a new stock index. He emphasized that the more substantive objective lies in concerted efforts to deepen the overall market. He underscored the stark contrast in the contribution of IDX-listed issuers to the MSCI index. Even with the application of new MSCI free float provisions, the percentage could fall below 1%, a figure significantly dwarfed by India’s 18-20% and China’s 30%.
This narrow investment landscape also imposes significant limitations on Danantara’s activities in the domestic stock market. “In essence, when we observe the average daily liquidity, it’s remarkably small, which severely restricts our investment options,” Ali added.
Regarding the precise amount Danantara has already deployed in the domestic capital market, including the allocation between equity and bond assets, Ali was not yet at liberty to disclose specifics. He also firmly refuted recent reports of Rp16 trillion being earmarked for entry into the stock market by the end of the year.
“That Rp16 trillion figure is incorrect. If asked whether we have already invested, I would say no, that’s not true. However, we will undoubtedly contribute. We are committed to playing a crucial part in supporting and contributing to the local financial market. But, I cannot disclose how much we intend to buy, whom we will buy from, or any other specifics,” he concluded.
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Summary
Danantara Indonesia is committed to deepening the national capital market, with a strong focus on equity instruments. The institution will avoid speculative “gorengan” stocks, instead rigorously assessing potential investments based on criteria such as return on equity, dividend yield, market capitalization, and daily liquidity. For fixed-income, Danantara strategically prefers highly liquid government bonds (SBNs), aiming to hold most until maturity, and will only consider older series if they offer attractive higher yields.
Recognizing the limitations of domestic asset classes, Danantara also plans to allocate investments in international capital markets to ensure robust risk-adjusted returns and diversified risk, a common practice among global sovereign wealth funds. The managing director highlighted that the shallow domestic market, evidenced by Indonesia’s low contribution to the MSCI index and limited liquidity, restricts investment options. While committed to supporting the local financial market, specific investment amounts or allocations were not disclosed, and reports of Rp16 trillion being earmarked for stock market entry were firmly refuted.