Danantara Defends Strategy After MSCI Market Warning
Indonesia's sovereign wealth fund Danantara reaffirmed its investment strategy after MSCI warned it might reclassify the country's equity market to standalone status.
The sovereign wealth fund Danantara reaffirmed its commitment to its current investment strategy after index provider MSCI warned it could reclassify Indonesia's equity market from emerging-market to standalone status. Such a move would remove Indonesian stocks from several major global indexes, a prospect that triggered a sharp selloff in the rupiah and the benchmark Jakarta Composite Index.
Danantara, which manages approximately $1 trillion in assets, stated that its confidence remains grounded in the country's economic fundamentals and the strength of its businesses. While the fund acknowledged that the MSCI assessment highlights market-governance issues requiring attention, it maintains that these problems are distinct from the underlying potential of Indonesian companies.
In response to the market volatility, Indonesian authorities announced measures to improve transparency and restore investor confidence to stabilize sentiment.
