Indonesia Has 'Ammunition' of Thousands of Trillions, Ready to Counter Fleeing Foreign Funds

Foreign investor selling pressure is once again testing the resilience of the Indonesian stock market. However, Indonesia actually possesses a line-up of domestic institutional investors with investment funds, cash, and assets under management totalling approximately Rp1,693 trillion. This strength is spread across BPJS Ketenagakerjaan, the Hajj Financial Management Agency (BPKH), Taspen, Asabri, Danantara Investment Management (DIM), the Indonesia Investment Authority (INA), and four state-owned enterprise asset managers. Commission XI Chairman of the House of Representatives Mukhamad Misbakhun previously stated that the large funds held by domestic institutions could be optimised to help replace outgoing foreign funds. BPJS Ketenagakerjaan is said to manage funds approaching Rp1,000 trillion, while BPKH’s managed funds are close to Rp200 trillion. ‘There is domestic strength to show how strong our fundamentals are. We have BPJS Ketenagakerjaan, we still have the Hajj Financial Management Agency, and we also have other pension funds. If foreign funds exit, it just requires orchestration during profit taking, the potential to replace foreign funds,’ Misbakhun said at the CNBC Indonesia Investment Forum. This statement is supported by BPJS Ketenagakerjaan’s latest audited financial report for 2025, which shows the Social Security Fund has investment funds of Rp897.85 trillion out of total assets of Rp921.30 trillion. The four state-owned asset managers consist of BRI Manajemen Investasi with AUM of Rp50.91 trillion, Mandiri Manajemen Investasi Rp45.08 trillion, BNI Asset Management Rp28.87 trillion, and PNM Investment Management Rp7.86 trillion, bringing their total managed funds to Rp132.72 trillion. The merger of these four managers could potentially increase the scale of fund management, transaction capacity, and investment efficiency. However, these AUM figures represent client mutual funds and management contracts, and placements must still follow prospectuses, investment mandates, and client interests. Danantara Chief Investment Officer Pandu Patria Sjahrir previously stated that around 50 per cent of Danantara’s investment portfolio would be placed in public-market investments as part of its strategic asset allocation, covering both bonds and public equities. Danantara has also expressed its readiness to act as a liquidity provider in the capital market, with funds potentially sourced from accumulated dividends of state-owned enterprises. The government has also announced a policy direction to encourage the placement of pension and insurance funds in the capital market from an average of around 8 per cent to 20 per cent, initially targeting large-cap and liquid stocks in the LQ45 index. The total Rp1,693.28 trillion is not cash that can be deployed simultaneously, as institutions like BPJS Ketenagakerjaan and BPKH must maintain benefit payments, and INA’s AUM includes partner funds. Nevertheless, a gradual increase in allocation can strengthen domestic demand when foreign funds exit.