Danantara's Tough Task to Restore Public Trust

JAKARTA, KOMPAS - The Investment Management Agency of Daya Anagata Nusantara, or BPI Danantara, has an additional task of improving public perception regarding their presence. The decline in the stock prices of state-owned enterprises, particularly those that joined Danantara in the initial phase, reflects the continued negative market sentiment toward this institution.

Senior Economist of Paramadina University, Wijayanto Samirin, believes that the numerous high-value corruption cases within companies have significantly influenced public perception of BPI Danantara as an institution established to manage assets and investments from all state-owned enterprises (BUMN).

"In the last 10 years, the Indonesian people have been bombarded with numerous corruption cases involving extraordinarily large amounts, starting from Asabri, Jiwasraya, Pertamina recently, (PT) Timah, and others," he stated during a discussion titled 'Are State Fund Managers Immune to the Law?' held online on Saturday (1/3/2025).

According to Wijayanto, the factors causing the decline in the stock prices of state-owned enterprises (BUMN) to be much deeper than the Composite Stock Price Index (IHSG) could also be influenced by the sentiment surrounding the presence of Danantara.

Based on data from the Indonesia Stock Exchange (IDX) processed by Trading Economics, over the past six months up to trading on Friday (28/2/2025), the stock prices of four state-owned enterprises (SOEs) that have been announced to merge with Danantara in the initial phase have experienced a decline.

The four issuers are PT Bank Mandiri Tbk (36.11 percent), PT Bank Rakyat Indonesia Tbk (35.07 percent), PT Telkom Indonesia Tbk (25.16 percent), and PT Bank Negara Indonesia Tbk (24.67 percent). The decline in the stock prices of these four issuers was higher than the decline in the Jakarta Composite Index (JCI) during the same period, which was 17.66 percent.

Apart from the issue of business orientation, Wijayanto continued, concerns related to transparency issues, corporate governance (good corporate governance/GCG), as well as the lack of a clear roadmap from Danantara, have further worsened market sentiment toward the shares of state-owned enterprises (BUMN) issuers.

We cannot fight the perception that today seems to compare Danantara with a bad SWF.

Wijayanto stated that the public has been too often disappointed by the corrupt behavior of public officials, as well as the initial process of Danantara, which was non-transparent and rushed, further fueling the spread of negative public sentiment.

"However, this public skepticism must be heard and viewed as a momentum for improvement for BPI Danantara policy makers," he said.

After delivering a press conference on the reduction in airline ticket prices at Terminal 2 of Soekarno-Hatta Airport, Tangerang, Banten, Saturday, the Minister of SOEs, who is also the Chairman of the Supervisory Board of BPI Danantara, Erick Thohir, was optimistic that over time, Danantara's presence could bring positive sentiment to the JCI.

According to him, Danantara needs time to prove that this institution is different from many failed sovereign wealth funds (SWF) in various countries. "We cannot fight the perception that today seems to compare Danantara with SWFs that are not good. That is very wrong. We will prove it later," he said.

According to him, there is a positive sentiment from Danantara's existence that can encourage an increase in the IHSG in the future. One of them is Danantara's support for improving the quality of investment from BUMN issuers.

The improvement in investment quality is the impact of the formation of an investment committee at the BPI Danantara Investment Holding, which is tasked with managing and regulating all BUMN investments.

"Initially, investment placement in BUMN was never discussed. But with Danantara, all investments will have an investment committee. That (investment commitment in Danantara) is a step forward," said Erick.

Regarding the weakening of the JCI which was also influenced by the current decline in the share prices of state-owned company issuers, according to Erick, it was also influenced by the sentiment of a number of tariff policies from the President of the United States (US), Donald Trump. To protect the domestic market, the US has raised import tariffs, for many countries, not just China.

"Its neighbor (Canada) is subject to a 25 percent tariff (import duty to the US). If we talk about large Chinese import tariffs, this is expected. This means there will be more uncertainty," said Erick.

Erick ensured that all management of BUMN companies, which total 47 companies, will be under the management of Danantara. However, for the initial stage, there are only 7 BUMNs whose assets are managed by Danantara, namely Pertamina, PLN, Mind ID, BRI, BNI, Bank Mandiri, and Telkom Indonesia.

Meanwhile, quoted from Youtube Berita Satu in the BNI Investor Daily Roundtable, Thursday, Chief Investment Officer (CIO) of BPI Danantara, Pandu Sjahrir, considered it natural for Danantara to receive the spotlight from many parties. This is because, as an institution, Danantara is trusted to manage state assets with a value of almost IDR 15,000 trillion.

"In the near future, we will explain to the public our plans, because it is also important for the public to manage expectations of Danantara," he said.

Many parties are concerned that weak aspects of governance, supervision, and transparency could cause Danantara to fail as a SWF institution, as happened with Malaysia's 1MDB.

However, for Pandu, the challenge should ignite the policy makers who have been trusted by the President to manage Danantara, to prove that this institution can be an accelerator for Indonesia's economic growth in the future.

Meanwhile, the Director of the Center for Law, Human Rights, and Gender, Institute for Economic and Social Research, Education, and Information (LP3ES), Hadi Rahmat Purnama, assessed that when viewed from a legal construction perspective, Danantara needs to emphasize its position as a public or private institution.

"As a public institution, it will be bound by the government. Where, Danantara functions as a development agency that must report to the President. If then viewed from the investment side with profit orientation, Danantara is not a public institution but a private institution," said Hadi.