Overview
- MSCI halted additions to its indexes and froze reported free-float increases for Indonesian stocks, citing investability risks tied to opaque ownership, trading and price formation.
- The Jakarta Composite Index slumped roughly 7% on Wednesday and as much as 8% on Thursday, prompting a trading halt as foreign investors sold heavily.
- Authorities announced measures including doubling the minimum free float for listed firms to 15% and reviewing affiliations of shareholders with stakes below 5%, saying talks with MSCI have been constructive.
- Goldman Sachs cut Indonesian equities to underweight and UBS lowered its stance, with Goldman estimating $2.2 billion to $7.8 billion of passive outflows if an MSCI downgrade occurs.
- Investor nerves reflect broader policy worries under President Prabowo, and MSCI signaled it will reassess Indonesia’s market accessibility by May if transparency does not improve.