Indonesia’s Danantara pledges $5 billion to home-grown companies as MSCI once again threatens a downgrade

Indonesia’s sovereign wealth fund Danantara plans to invest $5 billion in Indonesian businesses over the next six to nine months, its chief investment officer said, a commitment made before MSCI proposed downgrading the country to standalone status, a move that has since sent the Jakarta Composite Index down 11.6%.

“We’re encouraging our guys to focus on the fundamentals of Indonesian businesses because they’re growing healthily,” Pandu Sjahrir, Danantara’s chief investment officer, told Fortune on the sidelines of the DBS Asia Future Forward Conference in Singapore on Oct.

12.

“Why wouldn’t we be buyers of these types of businesses? It’s our job to look at, support and buy great companies.” This comes as the sovereign wealth fund , launched by Indonesian President Prabowo Subianto in 2025, steps up as a stabilizer for the country’s stock market, currently under scrutiny from global index providers like MSCI.

On Oct.

15, days after Fortune ’s interview with Pandu, MSCI proposed downgrading the country from emerging-market to standalone status .

This would remove Indonesian stocks from MSCI’s emerging and frontier-market indices and prompt investment funds to consider reducing their exposure to the country.

The country has until April 2027 to enact reforms. (Indonesia recently preserved its Secondary Emerging status in FTSE Russell’s annual count) That news sparked an 11.6% plunge in the benchmark Jakarta Composite Index.

The index is now down just over 40% for the year —showing just how much Indonesia still needs to do to convince global investors to back its companies, and why Danantara is stepping in.

“Once there’s a shift in perception, even if the fundamentals are good, the stocks will see a downturn,” Pandu admitted.

“Overall, Indonesian consumer stocks are down over 20%, and that isn’t even as bad as those related to mining or energy.” ‘Economic value,’ not necessarily ‘commercial value’ Pandu, who made his name in the private sector, now has to focus on different metrics than a straightforward return on investment.

“The idea is to create economic value, and not necessarily commercial value first—that’s an important distinction,” Pandu explained.

“If the projects serve as a significant economic multiplier and remain within the cost of capital range, we’ll most likely fund it.” Danantara has four arms: asset management, investment management, the Danantara Development Management Fund (DDMF) and Danantara Resources Indonesia.

The fund’s asset management wing supervises and corporatizes more than 1,000 of Indonesia’s state-owned enterprises, while its investment management segment seeks to maximize returns via bonds, public markets, and domestic and foreign equities.