10 June 2026 (closed)
Jakarta Composite Index (5,902.38) +155.73 +2.71%
Against the Tide: Indonesia’s Danantara Defies Outflows with $4.6B Debut Bond Demand
Some might say that we live in a period where market logic is hard to analyze. This sentiment resurfaced after the announcement that Indonesia's state sovereign wealth fund Danantara attracted a peak orderbook for its debut US dollar bond sales of around USD $4.6 billion, which is over three times the total issuance size.
Why is this surprising? Well, we have seen massive capital outflows from Indonesian bonds and stocks in recent months amid severe global uncertainty (particularly related to the volatile situation in the Middle East) that put significant pressure on the rupiah. Moreover, there is rising speculation that the US Federal Reserve may need to raise its key interest rates to combat inflation.
Meanwhile, there is concern over the (fiscal) policy of President Prabowo Subianto's cabinet. This includes Danantara (and its units) as too much money and political power is being concentrated is this relatively new vehicle without substantive checks and balances.
Therefore, for a vehicle without an established track record to attract around USD $4.6 billion in demand from the global investor community is a remarkable feat. Obviously, it is a relatively safe investment as it is backed by the Indonesian government. Danantara originally intended to raise only USD $1.0 billion ($500 million per tranche). However, because the orderbook was so overwhelmingly thick, it deliberately upsized the deal to USD $1.5 billion. This shows active capital management.
Danantara sold USD $750 million in five-year bonds, as well as USD $750 million in 10-year bonds, with yield coupons of 5.35 percent and 5.95 percent, respectively. The great advantage of seeing robust demand is that Danantara managed to cut the final yields by 35 basis points (0.35 percent) which will save it millions of dollars in annual interest payments.
Overview Danantara's US Dollar Bond Sale:
| Five-Year Tranche | Ten-Year Tranche | |
| Yield | 5.35% | 5.95% |
| Regional Allocation | United States (38%) Europe, Middle East & Africa (41%) Asia (21%) |
United States (52%) Europe, Middle East & Africa (31%) Asia (17%) |
| Investor Type | Asset/Fund Managers (82%) Insurance/Pension Funds (10%) Banks (7%) Private Banks/Others (1%) |
Asset/Fund Managers (72%) Insurance/Pension Funds (25%) Banks (2%) Private Banks/Others (1%) |
| Bonds Sold | USD $750 million | USD $750 million |
Source: Danantara
The success of Danantara's bond sale may very well have been a reason why we saw the return of risk appetite on the Indonesian market on Friday (12 June 2026). At the end of the Indonesian trading day, the benchmark Jakarta Composite Index had soared 2.07 percent to close just above the 6,000-point threshold, while the rupiah appreciated 0.61 percent to IDR 17,865 per US dollar.
Meanwhile, the central bank of Indonesia (Bank Indonesia), which unexpectedly raised its benchmark interest rate by 25 bps to 5.50 percent on Tuesday (9 June 2026) to defend the fragile rupiah, stated that foreign investors have responded positively to the rate hike as it strengthened foreign demand for government bonds (SBN) and Bank Indonesia Rupiah Securities (SRBI).