Indonesian Stocks Plunge as MSCI Threatens to Drop Market from Indexes
The potential downgrade by MSCI, an influential index provider, adds to a deepening crisis of investor confidence in the economic policies of Indonesian President Prabowo Subianto.
Indonesian shares fell approximately 11% on Friday, marking the largest single-day decline in 28 years. The slump follows a proposal by MSCI, a major stock market index provider, to reclassify Indonesia as a Standalone Market. This move would remove the country from MSCI's main emerging-market groupings, placing it in the same category as Palestine, Panama, and Jamaica.
MSCI stated that market participants have raised significant concerns regarding the investability of the Indonesian equity market, citing suspected coordinated trading and a lack of clarity in shareholding structures. The proposed reclassification could force global funds that track the MSCI emerging market index to sell their Indonesian holdings.
According to The New York Times, the potential downgrade by MSCI is contributing to a deepening crisis of investor confidence regarding the economic policies of President Prabowo Subianto.
Brief written by urgent.news from The New York Times, Euronews — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.
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- Indonesian stocks plunge 11% as MSCI proposes emerging market downgrade euronews.com
- HSI gains ground but Indonesian stocks plunge news.rthk.hk
- Indonesian Stocks Sink as MSCI Mulls Downgrade bloomberg.com
