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‘Panic’ selling hits Indonesian markets on MSCI expulsion threat
- On Monday, Jakarta's benchmark stocks fell over 5 percent following an 11.6 percent plunge on Friday, as index provider MSCI proposed shifting Indonesia from 'emerging markets' to 'standalone' status, risking international capital access.
- MSCI had threatened a downgrade to 'frontier' status in January due to ownership opacity and limited 'free float,' but stated on Friday that lack of remedial progress meant even that status would not reflect current severity.
- Cutting its lower auto-rejection limit to 7 percent from 15 percent on Monday, the Indonesia Stock Exchange aimed to give investors 'an opportunity to evaluate and digest available information.' Regulators unveiled $116.4 million in fines for alleged trading manipulation.
- President Prabowo Subianto's government faces mounting pressure as the rupiah weakens to 18,040 per dollar, compounded by earlier sovereign rating outlook cuts from Moody's and Fitch amid concerns over centralized policymaking.
- MSCI will collect feedback until the end of April 2027 before announcing its decision by June 30, while Goldman Sachs estimates a full removal could trigger $5.6 billion in passive outflows.
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An economy with a growth rate exceeding 5% and ample foreign exchange reserves can see its stock market plummet by over 10% in a single day. Indonesia's recent market turmoil presents this seemingly contradictory situation. The immediate trigger for this turmoil was the announcement by the global index provider MSCI on October 15th that it was initiating a consultation process to reclassify the Indonesian stock market from an "emerging market" t…
Indonesia stocks rebound as questions persist over market fix
The Jakarta Composite Index rose as much as 4.3%, clawing back some of a roughly 15% two-day plunge that was its steepest since 1989. Even after the rebound, Indonesia remains the world’s worst-performing stock market.
·Mumbai, India
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Coverage Details
Total News Sources50
Leaning Left3Leaning Right9Center6Last UpdatedBias Distribution50% Right
Bias Distribution
- 50% of the sources lean Right
50% Right
L 17%
C 33%
R 50%
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