👟 Walk the Talk: Indonesian Outflows
Acrostics Asia has been connecting the dots long before Indonesian stocks and bonds plunged in late January 2026.
Acrostics Asia has been connecting the dots across the Indonesian sovereign and state-owned enterprises (SOEs) long before volatility rocked the stock and bond markets in late January 2026.
The proof is in the file.
Key Timeline
Acrostics Asia wrote that Indonesian sovereign fund Danantara was likely designed to pool the country’s SOEs and leverage up to finance President Prabowo Subianto’s projects.
Acrostics Asia flagged that the wave of layoffs in Indonesia’s labour-intensive manufacturing sector risked dampening consumption.
Acrostics Asia noted that a revision of Indonesia’s SOE law to set up Danantara was fast-tracked through the Parliament and dividends from the SOEs would flow to the sovereign fund instead of the state budget.
Acrostics Asia wrote that the room for then-Finance Minister Sri Mulyani Indrawati to move was more limited after the president ordered her ministry to report directly to him, instead of the Coordinating Ministry for Economic Affairs. She was also assigned two deputies who were loyal to the president.
Acrostics Asia flagged that capital started flowing out of the country after the president took office in October 2024 partly due to fears of being caught on the wrong side of the power consolidation.
A task force led by the Defence Minister started confiscating large swathes of allegedly illegal palm plantations and handing these areas to a new SOE.
Acrostics Asia connected the jobless numbers, savings rate, mortgage defaults and banking ratios to infer that the economy was likely weaker than what the official statistics suggested.
Acrostics Asia wrote that public anger grew against Sri Mulyani partly due to the more aggressive tax collection, but the problem was bigger than one person as Indonesia’s traditional growth engines were sputtering.
Despite media reports that Sri Mulyani was abruptly sacked, Acrostics Asia put the pieces together and pointed out that the president’s camp likely sought to seize the narrative as it became clear that the former World Bank managing director was serious about leaving.
Acrostics Asia wrote that Danantara transferred some dividends from the healthier SOEs to support their troubled peers, but the fund had to get third-party capital to break the cycle.
However, concerns about Indonesia’s widening deficit may push up borrowing costs for Danantara in the international markets.
Acrostics Asia wrote that the president’s nomination of his nephew to Bank Indonesia was part of a growing centralization as the former general tightened his grip over the country’s financial guardians, SOEs and resources sector.