(Bloomberg) -- Indonesian stocks trimmed losses after the country’s new sovereign wealth fund said two former presidents will be advisors, easing market concerns over its leadership.

The benchmark Jakarta Composite Index closed 1.6% lower Monday, paring a loss of 4.7%, after the announcement. The rupiah lost about 0.3% against the dollar, putting the currency closer to its weakest level since 1998.

Danantara, the sovereign wealth fund, said former presidents Joko Widodo, popularly known as Jokowi, and Susilo Bambang Yudhoyono will join its advisory council that also includes Bridgewater Associates founder Ray Dalio and former Thai prime minister Thaksin Shinawatra.

Indonesia’s markets have come under pressure in recent months as President Prabowo Subianto’s populist agenda and firmer grip on power raise concerns over government finances and the growing role of the state. His administration on Monday started transferring ownership of top state-owned companies to the newly-created wealth fund that reports directly to the leader, which contributed to sharp losses in stocks in the morning.

After unveiling Danantara’s management team, its chief investment officer Pandu Sjahrir tried to allay investors’ worries at a briefing on Monday. “There is a lot of noise and concern in the market, especially on the formation of Danantara’s team and management,” he said. “Hopefully, today’s event answers that. That everyone is a professional.”

The effort seems to have rekindled optimism among some investors.

“We believe much of the de-risking has already taken place or been absorbed,” said Mohit Mirpuri, a fund manager at SGMC Capital Pte in Singapore. “Valuations are undemanding, pessimism is at extremes, and the risk-reward setup looks increasingly attractive.”

The selloff earlier Monday was reminiscent of the rout on March 18, when the benchmark stock index fell as much as 7.1%, the steepest intraday decline since 2011. It breached the 5% threshold that day and triggered circuit breakers that halted trading for 30 minutes. Down over 12% this year, the index remains one of the world’s worst performers.

A series of moves by President Prabowo in recent months, including the launch of the new sovereign wealth fund, marked an unprecedented accumulation of power that has triggered concerns about political influence and transparency. Meanwhile, a proposal to further expand the central bank’s mandate also has raised questions over its independence as Prabowo looks to ramp up growth.

Global funds sold a net $142.3 million of Indonesian equities on March 21, the seventh straight session of outflows, according to Bloomberg data. Foreign investors have withdrawn more than $2 billion so far this year.

--With assistance from Abhishek Vishnoi, John Cheng and Matthew Burgess.

(Updates with benchmark index closing price.)