Fitch Flags Investor Worries Over Danantara After Outlook Cut

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April 28, 2026 | 01:49 pm

TEMPO.CO, Jakarta - Fitch Ratings, a global credit rating agency, has outlined several investor concerns regarding Indonesia’s sovereign wealth fund Danantara, which was also a key factor in the agency’s decision to revise Indonesia’s sovereign debt outlook from stable to negative in March 2026.

“From our discussions with various investors, some potential issues that have emerged are related to governance,” said Samuel Kwok, Head of International Public Finance for Asia-Pacific at Fitch Ratings, in an interview with Tempo at the St. Regis Jakarta on Thursday, April 23, 2026.

He pointed to concerns over reporting concentration, noting that Danantara reports directly to the president.

He also highlighted worries that Danantara could be used to finance government programs, particularly in situations where there is a gap between state budget capacity and expenditure needs.

“When there is a gap between the government’s budget and spending needs, Danantara is used to cover some of those needs,” Samuel said.

He stressed that Fitch’s assessment also depends on how clearly Danantara defines its role as a sovereign wealth fund.

“If an entity claims to be entirely commercial, but in reality is not, expectations can go awry. This can lead to surprises because investment decisions can be influenced by political aspects, not solely return,” he said.

However, Samuel noted that Danantara is still a newly established institution and remains in its early stages, meaning its track record is limited. He added that governance-related concerns are not unique to Indonesia and are also seen in sovereign wealth funds in other countries.

Meanwhile, Danantara Chief Investment Officer Pandu Sjahrir said the institution has been mandated to build a world-class sovereign wealth fund.

“For the first time, we are consolidating all state-owned enterprises. Of course, it is a major political decision that must be made, but we want to execute it to generate profit,” Pandu said during the Fitch on Indonesia 2026 discussion at the St. Regis Jakarta on Thursday.

Read: Fiscal Strain in Tight Space

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