‘Panic’ blamed for record foreign outflows from stock market
Analysts say Friday’s stock market rout was driven by panic-selling following MSCI’s consideration to reclassify Indonesian equities in its global indexes, pushing cumulative foreign outflows for the year to a historical high of Rp 88.19 trillion.
In a dramatic turn of events, Indonesian foreign investors dumped a record Rp 88.19 trillion ($54.7 billion) of stocks on Friday, marking the highest cumulative outflows for the year. The sudden exodus was reportedly triggered by panic-selling amid MSCI's consideration to reclassify Indonesian equities into its global indexes. Analysts warn that the move could intensify sell-off pressure and market volatility, as investors grapple with "trust issues" over transparency, liquidity and governance credibility in the capital market.
Even though the final decision to reclassify Indonesia's equities will not be made until June 2027, the sharp correction in Friday's stock market has already surpassed the worst levels seen during the coronavirus pandemic of 2020 and the 2008 global financial crisis.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
