Indonesia Clings to Emerging Markets Mantle as MSCI Extends Review to November
MSCI said reforms have not yet eased concerns over disclosure and trading data, and Goldman Sachs estimated a possible $13 billion in outflows.
- On Tuesday, MSCI Inc. extended its review of Indonesian equities until November, opting against launching a formal consultation to downgrade the country to frontier-market status.
- MSCI froze Indonesian stocks in January, citing opaque ownership structures and unreliable trading data; authorities have since introduced reforms including raising minimum free-float levels to 15%.
- The benchmark Jakarta Composite Index has dropped nearly 30 per cent this year, with foreign investors net selling $3.89 billion in equities as market capitalisation shrunk from more than $900 billion to around $600 billion.
- SGMC Capital partner Mohit Mirpuri stated, "The market retains emerging market status, but with a warning label attached," while MSCI stressed that consistent implementation of reforms determines the country's fate.
- MSCI warned that if sufficient progress is not evident by the November review, it will consider options including a consultation on reclassifying Indonesia from emerging markets to frontier status.
12 Articles
12 Articles
Indonesian stocks get MSCI reprieve but clock ticks on market reforms
SINGAPORE: A five-month extension to index provider MSCI's review of Indonesian equities gives Jakarta regulators a longer runway for reforms, but will not immediately lure long-term capital back to the battered market, investors say.
MSCI delays Indonesia’s market status review until November
MSCI Inc. again decided to postpone its review on Indonesian equities, saying it needs more time to see whether recently announced transparency reforms are effective. The index compiler said the country’s moves regarding enhanced disclosures, more granular investor classification and a roadmap to raise the minimum free-float requirement to 15% are a step in the right direction. Still, what matters for global investors is the consistent implemen…
Indonesia wins time, not trust, as MSCI extends emerging-market review
Indonesia has retained its emerging-market status for now after MSCI extended its review until November, but concerns over transparency, market accessibility and investor confidence continue to cast a shadow over Southeast Asia's largest economy
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