AmCham Update Vol. 7 #086

Danantara Plans IPOs for State Companies, Bank Indonesia says Consumer Confidence still in the Black, Indonesia Defends Multilateralism at BRICS Meeting, Are Cooperatives Up to the Challenges of Carbon Trading? DPR Discusses Dropping Deputy Heads from Local Polls

Aug 12, 2026

Danantara Bullish on SOE IPOs but Analysts Urge Caution

Indonesia’s state asset fund Danantara is betting on some of the country’s best state-owned enterprises (SOEs) to sharpen corporate governance and boost the market by listing on the Indonesia Stock Exchange (IDX).

Danantara chief investment officer Pandu Sjahrir told reporters on Aug 10 that the initial public offering (IPO) process will happen over the next 6-12 months and be handled by Danantara Asset Management (DAM).

Analysts say the planned IPOs, at least for better-performing SOEs, could improve transparency and inject more liquidity into the market. But with the IDX in the doldrums, they caution that bad timing or inadequate advance work could turn off investors or crowd out other companies seeking fresh capital.

Previously, Danantara chief operating officer Dony Oskaria said several SOEs are ready to go public, including pawnshop operator PT Pegadaian, fertilizer producer PT Pupuk Indonesia, port company PT Pelabuhan Indonesia (Pelindo) and airport operator PT Angkasa Pura Indonesia.

IDX president director Jeffrey Hendrik said on Aug 10 that no IPO proposals had been received yet but he hopes Danantara will help accelerate the process.

Some of the IPO candidates said that they had no immediate plans to go public. Pelindo spokesperson Benny Ariyadi told The Jakarta Post on Aug 7 that the company had not made any decision on an IPO. Pegadaian spokesperson Dwi Hadi Atmaka said the company is currently focused on business fundamentals.

Capital market analyst and founder of Traderindo, Wahyu Laksono, told the Post on Aug 10 that the capital market is sluggish due to foreign outflows, corrections in large-cap stocks and changes in stock weightings and free float assessments by global index provider MSCI. As a result, the index continues to move sideways.

Wahyu said large IPOs, if rushed, could lead to undervaluation and could risk “crowding out” other stocks, he said.

Wahyu said several SOEs have solid performance and scale, such as Pelindo and Angkasa Pura. Pegadaian is also deemed to have strong fundamentals.

Fertilizer company Pupuk Indonesia also has "relatively stable cash flow and a dominant market position," meaning it could attract institutional investors, said Wahyu.

Hendra Wardana, founder of Stocknow, cautioned that investor appetite for the stock market has yet to recover. “The government needs to be careful not to launch IPOs when investors are still taking a selective buying approach,” Hendra said.

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Consumer Confidence Remains Positive, says Bank Indonesia

The Consumer Confidence Index (CCI) for July 2026 stood at 116.8, according to Bank Indonesia (BI), staying in optimistic territory with an index value above 100.

“Consumer confidence regarding economic conditions remains resilient," BI spokesman Denny Prakoso said in an official statement on Aug 10

Consumer sentiment, however, fell for a third straight month in the BI survey as respondents were less optimistic in July while retail sales remain subdued.

The CCI fell from 117.8 points in June to 116.8 in July, the lowest level since September 2025. The CCI peaked at 127 points in January and remains well above the 100-point threshold representing generally optimistic sentiment.

“Consumer confidence in July 2026 was supported by the current economic conditions index and the consumer expectations index, both of which remained in optimistic territory despite declining from the previous month,” Denny said.

The current economic conditions subindex fell 1.3 points to 107.9, while the consumer expectations subindex slipped to 125.7 from 126.4 as job availability and business expectations remained under pressure.

Consumers also grew more cautious about durable goods purchases, with households spending between Rp 3.1 million and Rp 4 million (US$174-$225) a month down 4.9 points to 112.2, and their durable-goods purchase index down 8.5 points to 96.2.

Retail sales of cars, however, were up 23.1 percent year-on-year (yoy) in July, according to the Association of Indonesian Automotive Manufacturers (Gaikindo), continuing strong growth from June.

The softening of overall confidence poses a risk for household spending, which remains the prime driver of growth in Indonesia, wrote Samuel Sekuritas Indonesia in a note.

“The drop in discretionary spending appetite suggests households are becoming more cautious amid pressure on purchasing power, while continued weakness in employment sentiment will further restrain consumption, particularly given worsening labor-market conditions,” said Samuel Sekuritas Indonesia research managing director Harry Su.

Weaker domestic demand could mean fewer imports, which may support the rupiah by improving the external balance. A steeper slowdown, however, could hurt growth and pressure capital inflows and the currency, according to Bank Danamon lead economist Faiz Irman.

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Indonesia Calls for Defense of Multilateralism at BRICS Gathering

While amiable and lively, the BRICS Trade Ministers’ Meeting in India Aug 6-7 ended without a joint statement despite agreeing on “most agenda items,” according to Indonesian Trade Minister Budi Santoso in a statement on Aug 8.

Because the group operates by consensus, reaching full agreement on issues like a possible BRICS currency is difficult given the competing interests of members, especially India and China.

The meeting, ahead of the full BRICS summit in September in New Delhi, focused on strengthening a rules-based trading system with the World Trade Organization at its core. The group also pushed to help small and medium-sized enterprises (SMEs) build resilient global value chains.

“Indonesia stresses the importance of maintaining a rules-based multilateral trading system through a strong, inclusive and adaptive WTO,” Budi said.

Indonesia, the bloc’s newest member, warned against a more fragmented global economy. “The world could become increasingly divided, fragile and less able to address common challenges,” Budi said in his statement.

The group also discussed potential linkages between their respective fast payment systems and central bank digital currencies CBDCs), Reserve Bank of India Governor Sanjay Malhotra said at an event in Mumbai on Aug 11.

"Cross-border payments is an area of interest for all of us, including the BRICS, because we %u2060feel there is a lot of scope for reducing cost," Malhotra said. "Various options are on the table, but it is still at discussion stage, including CBDCs and linkages of fast payment systems."

Indonesia also participated in the BRICS Industry Ministers’ Meeting, which focused on SME development, logistics and green industries. “These areas are important to strengthen industrial resilience and boost manufacturing competitiveness,” said Indonesia’s Deputy Industry Minister Faisol Riza in separate statement.

BRICS, which was originally Brazil, Russia, India, China and later South Africa, now has 11 members with the inclusion of Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates and Indonesia.

China will assume the rotating BRICS chair from India in 2027 and host the group’s major summit, putting the world’s second-largest economy at the center of efforts to steer the expanded bloc’s economic agenda.

India Trade and Industry Minister Piyush Goyal said BRICS members had made progress in strengthening trade and economic cooperation during India’s year-long chairmanship, and expressed hope that those efforts would continue when Beijing takes over.

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Are Cooperatives Up to the Challenges of Carbon Trading?

Environment Minister Muhammad Jumhur Hidayat said the government is preparing a scheme for President Prabowo Subianto’s Red and White Cooperatives (KDMP) to manage carbon units and distribute carbon-trading revenues to villages.

“There will be a carbon market, and Indonesia has great potential as an oxygen supplier. Working along with the Cabinet, I want to ensure that the people receive the greatest share of the benefits from the carbon market,” Jumhur said on July 28.

Under the proposal, cooperatives would manage forest and mangrove areas, register resulting carbon units through the Carbon Unit Registration System (SRUK), and participate in carbon trading, allowing local communities to benefit directly from carbon revenues.

Launched on July 9 by the Environment Ministry, SRUK is Indonesia’s national carbon registry. Jumhur said the system is intended to strengthen the credibility and transparency of Indonesia’s carbon market.

Cooperatives Minister Ferry Juliantono added that the government wants cooperatives to expand into strategic sectors beyond their traditional role in small business.

Climate Policy Initiative Senior Manager Luthfyana Larasati questioned whether KDMPs are ready to manage carbon units, noting that carbon projects require specialized expertise.

“The management of carbon credit requires specialized technical expertise, including measurement, reporting and verification, which is far more complex than the basic functions of savings and loan cooperatives or food distribution,” Luthfyana told The Jakarta Post on August 11.

She added that many Red and White Cooperatives are still struggling to carry out their core functions, raising concerns over whether they have the capacity to take on carbon-market responsibilities. Cooperatives will also have to comply with IDX Carbon and Financial Services Authority regulations to participate in carbon trading.

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DPR Discusses Dropping Deputy District Heads from Local Elections

Indonesia’s House of Representatives (DPR) is considering a proposal to have voters elect only governors, mayors, and district heads, with deputy heads appointed afterward, amid concerns over recurring tensions between regional leaders.

National Awakening Party (PKB) lawmaker Muhammad Khozin raised the proposal during a July 30 DPR Commission II meeting with the Home Affairs Ministry. He argued that deputy candidates are often used primarily to attract votes, creating issues that can later fuel conflict with district heads.

Khozin cited data showing “disharmony” or disputes between heads and deputies in nearly 60 percent of districts, arguing that the problem is systemic and stems partly from deputies’ limited authority. He proposed allowing elected district heads to appoint their own deputies while giving deputies clearer responsibilities.

“As long as the regional head doesn’t delegate authority to the deputy, they cannot do anything. They have no role whatsoever,” Khozin said.

National Mandate Party (PAN) Deputy Chairman Saleh Partaonan Daulay said the proposal had been discussed among DPR factions and with election observers, but required further study and broader public consultation.

DPR Commission II member Deddy Sitorus of the Indonesian Democratic Party of Struggle (PDI-P) warned against changing the electoral system before clarifying the division of responsibilities between heads and deputies.

“I would prefer us to clearly regulate the duties and functions of deputy heads first to prevent ambiguity that could create room for conflict,” Deddy said on Aug 10.

Under Law No. 10/2016 on Regional Elections, candidates for regional head and deputy head must run as a pair nominated by political parties or coalitions.

Center for Strategic and International Studies (CSIS) political researcher Arya Fernandes warned that appointing deputies could create new disputes and raise questions of legitimacy if a district head leaves office. He urged lawmakers to improve the existing system rather than change how deputies are selected.

Regional Autonomy Watch (KPPOD) Executive Director Herman Suparman similarly argued that tensions stem largely from the limited authority given deputies rather than the electoral system itself. He urged lawmakers to clarify the powers of both position.

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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff.

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