Indonesia' government will set up a state investment agency to manage holdings in some of the biggest state companies after parliament passed a bill on Tuesday approving the body, which is intended to operate like Singapore's investment arm Temasek.

Indonesia’s parliament passed an amendment to the state-owned enterprises law, laying the legal foundation for a new entity expected to manage state assets while actively seeking investments domestically and potentially overseas.

Indonesia's parliament on Tuesday approved a bill that allows the government to set up an investment agency that can manage stakes in some of the biggest state companies and is intended to operate like Singapore's investment arm Temasek.