Danantara Boss: Indonesian Blue Chip Shares Are Very Cheap, but the Market Lacks a 'Story'
JAKARTA - The valuation of leading stocks, or blue chips, on the Indonesia Stock Exchange (BEI) is still considered cheap. However, the domestic stock market is seen as lacking catalysts and a “big story” to attract foreign fund flows back.
Chief Investment Officer (CIO) of Danantara Indonesia, Pandu Patria Sjahrir, assesses that the valuation of blue chip stocks is currently at a cheap level, especially banking sector stocks that offer high dividend yields.
Nevertheless, the exchange still lacks catalysts, investor confidence, and a strong growth story to draw foreign fund flows back in.
He even states that investors can currently obtain a dividend yield of around 8 per cent to 11 per cent simply by holding shares of major banks. According to him, such dividend returns are sufficient to reduce investment costs while waiting for share price increases.
“That’s why I said earlier you can buy bank (stocks), you can get 8-11 per cent just by holding, well, whatever happens with the rise, that’s returning capital through dividends alone, I’m reducing the cost,” Pandu said when met at the BEI building in Jakarta on Monday (11/5/2026).
He stated that foreign fund flows remain an important factor for the domestic capital market, particularly for blue chip stocks that have long been the primary targets of global investors.
“Like it or not, we’re speaking plainly, the flow is indeed very important, especially foreign flow. This is also very important where we also need this foreign flow, especially for blue chip stocks. Because most of them buy what are called blue chip stocks,” he continued.
Moreover, Pandu predicts that in the second quarter of 2026, technical pressures will become even more pronounced due to the weakening US dollar occurring alongside the dividend distribution season for major issuers.
This situation requires foreign investors to sell stocks for currency conversion needs and index portfolio adjustments.
Despite this, he still views Indonesian blue chip stocks as currently at very cheap valuation levels.