‘Investor confidence high’: Indonesia touts Danantara bond success amid recent market turbulence
Ministers highlight Indonesia’s efforts to strengthen its investment climate as sovereign wealth fund Danantara raises US$1.5 billion in its debut international bond offering.
The logo of Danantara Indonesia, the country’s second sovereign wealth fund, is seen at their headquarters in Jakarta on Mar 31, 2026. (Photo:AFP/Anugerah Billy)
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JAKARTA: Indonesia sovereign wealth fund Danantara’s success in raising US$1.5 billion in its debut international bond offering reflects investors’ confidence in the country’s economic outlook, two top officials said on Monday (Jun 15).
“Initially, we planned to raise US$1 billion, but orders reached approximately US$4.6 billion during the book-building process,” said Indonesia’s Investment and Downstream Minister Rosan Roeslani, who is also Danantara’s chief executive officer.
“Given the strong demand, we decided to increase the issuance size from US$1 billion to US$1.5 billion, split evenly between five-year and 10-year tenors,” news outlet The Jakarta Post quoted him as saying during a press conference at the Presidential Palace.
Book-building is the process of generating, capturing and recording investor demand for shares.
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“This also proves that investor confidence in Indonesia is high,” said Rosan.
Echoing these comments on investor confidence, State Secretariat Minister Prasetyo Hadi also said at the press conference that the Prabowo Subianto government would continue to take steps to strengthen economic fundamentals and improve Indonesia’s investment climate.
The ministers’ comments came on the back of recent market turbulence and a decline in the rupiah, along with closer scrutiny of the government’s fiscal policies which have incited student protests in recent days.
The press conference came a day after President Prabowo’s instruction to publicise positive developments in the country’s investment landscape, media outlets reported.
The five-year Danantara bonds carried a yield of 5.35 per cent while the 10-year tranche was priced to yield 5.95 per cent. The robust demand allowed Danantara to lower final yields by 35 basis points from initial price guidance, Reuters earlier reported.
Rosan said the final pricing exceeded market expectations, particularly given concerns that Danantara’s debut issuance could face weak demand or require significantly higher borrowing costs.
“Many people predicted that nobody would want to buy the bonds, or that we would have to offer very high rates. Neither of those happened,” he said.
“This demonstrates that the credibility of both Danantara and the government remains strong, especially when we engage investors openly and transparently and clearly communicate our future plans.”
Investors from the United States accounted for the largest share of demand for the bonds, making up 38 per cent of allocations for the five-year tranche and 52 per cent of allocations for the 10-year tranche.
Rosan attributed the success in part to Danantara’s extensive international roadshows, where the management team met investors across Hong Kong, Singapore, Boston, London and New York.
“We met around 122 investors from various countries during the roadshow,” he said.
“This result exceeded the expectations of many people who initially doubted that investors would be willing to buy Danantara’s bonds,” he added.
INSTILLING CONFIDENCE
Prasetyo outlined a number of government strategies aimed at building and restoring public trust amid recent economic turmoil.
“President (Prabowo) reiterated several undertakings that, in our opinion, are part of the efforts to instill confidence in business actors, which in turn will build public trust,” Prasetyo was quoted as saying by Tempo.
Prabowo, he said, has emphasised the importance of deregulation to streamline licensing, allowing the investment climate to flourish and the national economic ecosystem to become more competitive.
The president has also called for downstreaming and industrialisation to be accelerated, he said.
Indonesia’s economic and financial policies have come under pressure in recent weeks.
For instance, its tougher approach to natural resources and foreign investment drew the concern of investors, with a Chinese business group complaining in a letter to Prabowo that rising costs, stricter enforcement and alleged misconduct by officials were hurting Chinese-backed companies in Indonesia.
Its establishment of a new government body, Danantara Sumber Daya Indonesia (DSI), to manage the export of key commodities such as crude palm oil, coal and ferroalloys, also rattled markets.
Indonesia’s stock market has faced turbulence this year, with the benchmark Jakarta Composite Index slumping to its lowest level in five years earlier this month.
The rupiah hit an all-time low last week, and the Indonesian government intervened to steady the currency and calm the stock market. The central bank announced an emergency off-cycle rate hike while the government increased yields on Indonesian assets to attract portfolio inflows and support the rupiah.
Analysts previously told CNA the steps had calmed markets in the short term. To restore credibility in the longer term, the government should show credible fiscal correction, reduce policy surprises and avoid statements that appear hostile to foreign investors, experts said.
Prasetyo noted the strengthening of the rupiah is inextricably linked to export and import performance which, in turn, is linked to the implementation of downstreaming and industrialisation programmes.
He said stability is crucial to the business climate, and the government is calling on the public, market players, and economic actors to work together and strengthen the economy.
Source: Agencies/as(cc)
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