Published • loading... • Updated
Indonesian Stocks Slide to Six-Year Low as MSCI Warning Weighs
Goldman Sachs said a full removal from MSCI emerging-market indexes could trigger about $5.6 billion in passive fund outflows.
- On Monday, Indonesian stocks plunged to a six-year low after MSCI proposed on Friday reclassifying the country from 'emerging markets' to 'standalone' status, rattling investor sentiment and raising the prospect of expulsion from major global equity benchmarks.
- MSCI had threatened a downgrade to 'frontier' status in January due to opacity in trading behavior, but said on Friday that limited progress meant even that lower status would not reflect the severity of ongoing governance concerns.
- Goldman Sachs warned in a Sunday note that full removal could trigger approximately $5.6 billion in passive fund outflows. Active funds benchmarked to these indices hold more than $8 billion in Indonesian equities, though any selling would remain discretionary.
- The Indonesia Stock Exchange cut its lower auto-rejection limit to 7% from 15% on Monday to give investors "an opportunity to evaluate and digest available information." The Financial Services Authority, or OJK, unveiled sanctions totaling $116.4 million against alleged trading manipulation.
- MSCI's warning raises stakes for President Prabowo Subianto's government, which faces negative sovereign rating outlooks from Moody's and Fitch. Analysts warn that market dislocation could trigger tighter financial conditions and spillover into the rupiah and domestic bond yields.
Insights by Ground AI
13 Articles
13 Articles
Channel News Asia+2 Reposted by 2 other sources
Indonesian stocks slide to six-year low as MSCI warning weighs
SINGAPORE: Indonesian stocks slid to a six-year low on Monday (Oct 19) as a warning from MSCI over possible expulsion from its global indexes next year rattled fragile investor sentiment, sharpening the focus on how Jakarta intends to allay the index provider's concerns.Jakarta's benchmark stocks fell over 5
·Singapore, Singapore
Read Full Article
MSCI studies expelling Indonesia from its indices: Jakarta falls to six-year minimums and the rupee breaks the record. Goldman foresees 5.6 billion in departures. MSCI entry threatens to reclassify Indonesia as an independent market and sinks the Jakarta stock market to six-year minimums aparece primero en Merca2.
Coverage Details
Total News Sources13
Leaning Left1Leaning Right3Center2Last UpdatedBias Distribution50% Right
Bias Distribution
- 50% of the sources lean Right
50% Right
L 17%
C 33%
R 50%
Factuality
To view factuality data please Upgrade to Premium
