Indonesia’s sovereign wealth fund Danantara has submitted a bid to buy a stake in the country’s stock exchange as the bourse prepares for demutualisation, the exchange’s chief executive said on Wednesday.
Danantara’s proposal is being considered while the exchange awaits bids from other parties, Jeffrey Hendrik told reporters, without providing details about the proposal.
Following MSCI’s first downgrade warning for the Indonesian equity market in January, authorities announced they would speed up the “demutualisation” process of the IDX, which would make the bourse a shareholder-owned and for-profit company, instead of the member-controlled, self-regulating organisation it is currently.
Indonesian assets have been under renewed pressure after MSCI’s surprise announcement this month that it could downgrade Indonesia’s equity market to “standalone” status, a more severe warning than the one in January.
The rupiah has been trading near its record low. The main stock index fell 1.65% as of midday trading on Wednesday, extending accumulated losses for this year to about 40%, making it the world’s worst performing equity market.
Demutualisation has been mandated by law since 2023, but has taken a long time to achieve, partly because of disputes over who will become the bourse’s controlling shareholder.
The transition would bring it in line with regional peers and is expected to improve governance, authorities have said.
Danantara, launched by President Prabowo Subianto in February last year, may take a 40% stake in IDX, according to local media reports.
In September, Indonesia’s financial services authority issued a rule on IDX demutualisation, allowing not only Danantara to hold shares but also Indonesia’s finance ministry and central bank. It also capped the maximum share ownership for a single holder at 50%.
Jeffrey said neither the ministry nor the central bank had put in any offer to buy a stake, but added that the IDX is still open to new bidders.
The IDX would sell new shares to accommodate its new stakeholders, he said, adding that an initial public offering would be launched at a later date.
Reuters
