Danantara CEO: Indonesian Banking Stocks Still Below Fair Value
Jakarta (ANTARA) — Rosan Roeslani, Chief Executive Officer of Danantara Indonesia, said that bank shares on the Indonesia Stock Exchange (BEI) are currently undervalued, with price-to-book value (PBV) below 1x. In normal conditions, he explained, the valuations for the banking sector should be in the 2x to 3x PBV range, indicating definite upside. “In banking, the PBV is below 1 now, whereas in normal times it would be above 2, above 3. So there’s definitely upside potential,” Rosan told reporters at a press conference at the BEI building in Jakarta on Tuesday.
He also stressed that price volatility in the stock market is normal, while the fundamentals of the listed issuers remain solid and offer attractive yields. “From our perspective, it’s true there will be ups and downs in the market, but if you look at the fundamentals, the companies are solid and yield is high; current pricing is very good,” he said. Rosan noted that this confidence aligns with positive developments in the number of retail investors in the Indonesian market, which now stands at about 26-27 million, up from around 20 million last year, an increase of about 6 million.
He said the rise reflects growing belief in the market’s future prospects. “Logically, this growth occurs because our investors are confident the bourse will improve and be promising going forward. If there were no prospects, the numbers would have fallen,” Rosan added. He credited ongoing investor education by BEI and the Financial Services Authority (OJK), particularly among domestic and younger investors, as essential for communicating that medium- to long-term investments in the equity market can deliver good returns and support economic growth.
Data from the close of session I on Tuesday (19/05) showed the Indonesia Stock Exchange Composite Index (IHSG) fell 202.97 points or 3.08% to 6,396.27, while the LQ45 index dropped 13.67 points or 2.10% to 637.42. Trading frequency reached 1,731,057 transactions with 27.96 billion shares changing hands valued at Rp15.13 trillion. A total of 96 shares rose, 611 fell, and 107 were unchanged.
On Tuesday (19/5), Deputy Speaker of the House of Representatives Sufmi Dasco Ahmad, together with Danantara Indonesia officials, visited the BEI building. Rosan Roeslani, accompanied by Danantara COO Dony Oskaria, were welcomed by OJK Chairman Friderica Widyasari Dewi and BEI representative I Gede Nyoman Yetna.