Rupiah and IHSG Strengthen, Danantara: Investor Perception Turns Positive

CEO of the Investment Management Agency (BPI) Danantara, Rosan Perkasa Roeslani, believes investor confidence in Indonesia is showing significant improvement. This change in perception is reflected in the recent strengthening of the capital market (IHSG) and the rupiah exchange rate. According to Rosan, this positive trend is the result of a series of government policies and Danantara’s proactive steps in conducting investment roadshows in various global financial centres. He stressed that financial market conditions would not improve organically without efforts to rebuild investor confidence in the national economic prospects. “If we look, indeed in the last few days both our capital market and our rupiah have experienced relatively rapid strengthening,” Rosan said during a press conference at the Presidential Office in Jakarta on Monday (15/6). One of the main factors reversing market sentiment was Danantara’s intensive meetings with around 122 international investors. Rosan explained that these investors were not merely potential buyers of Danantara’s global bonds, but market players with large exposure to various Indonesian financial instruments. During the series of meetings, Rosan acknowledged there were very dynamic and critical discussions regarding domestic economic conditions, the direction of government policy, and Danantara’s internal governance. “Indeed, the Q&A was intense, very intense. So that shows their seriousness,” he revealed. However, the open dialogue actually yielded a positive response because it provided the clarity the market needed. Rosan assessed that the market pressure that had occurred was driven more by perception factors than economic fundamentals. He believes that in the medium and long term, the Indonesian economy remains on a strong path. Global institutional investors, Rosan continued, tend to make decisions based on long-term prospects. They pay special attention to solid banking sector growth, attractive yields, and the valuation of Indonesian companies which are currently considered quite cheap after the market correction of the last few months. “When they see our fundamentals are good, our banking growth is good, dividends are good, yields are good, and the price is low, automatically they see this is the time to buy,” Rosan explained. As a sovereign wealth fund, Danantara is committed to applying the principles of openness, good corporate governance, and accountability. This is the main key to maintaining credibility internationally. Rosan added that many investors appreciate Danantara’s programmes, which are considered to have bright prospects and are managed by a professional team. This confidence also drives the positive response to the institution’s various initiatives, including the plan for its inaugural global bond issuance. “The perception now, alhamdulillah, has shifted to a positive trend and we certainly hope this continues to increase along with the consistency of policy and transparency that we maintain,” he concluded.