Danantara Focuses on Long-Term Outlook After IHSG Dented by Export-Focused SOE Sentiment

Jakarta (ANTARA) - Chief Executive Officer (CEO) of Danantara Indonesia, Rosan Roeslani, said the company remains focused on its long-term investment targets after the Jakarta Composite Index (IHSG) was affected by sentiment surrounding the formation of a state-owned enterprise (BUMN) dedicated to exports.

‘When it comes to investments, we look at it with a long-term approach,’ Rosan told reporters at the office of the Coordinating Ministry for Economic Affairs in Jakarta on Thursday.

Rosan argued that the IHSG correction happening now is not only influenced by a single sentiment. Overall, the capital market is still under pressure after Morgan Stanley Capital International (MSCI) removed six Indonesian stocks from the MSCI Global Standard Index.

Nevertheless, Rosan said Indonesia’s economy has strong fundamentals. The Himbara banks group (the state-owned banks) has also shown solid performance with yields around 10-11 percent.

The IHSG closed on Thursday afternoon down 223.56 points, or 3.54 percent, at 6,094.94. The plan to centralise commodity exports by export-focused BUMN has been cited as the main sentiment behind the IHSG’s weakness.

Market participants, both domestic and foreign, responded to plans to issue Government Regulation (PP) on the Governance of Export of Natural Resource Commodity (SDA) including regulation of BUMN as a single exporter for several strategic commodities.

Market participants also responded to the establishment of PT Danantara Sumberdaya Indonesia (DSI) as an export-specific BUMN for the natural resources sector.

One of the reasons for establishing the export-specific BUMN is the alleged practice of underinvoicing export commodities, which is said to have harmed the state up to Rp15,400 trillion over 34 years.