From BigGo Finance · BigGo Finance · · 1m 30s
MSCI Downgrades Indonesia to Standalone Market
MSCI moves Indonesia to standalone market status, triggering 10% Jakarta stock plunge and circuit breaker.
In brief
MSCI moves Indonesia to standalone market status, triggering 10% Jakarta stock plunge and circuit breaker. MSCI downgrades Indonesia to standalone market status, causing Jakarta stocks to drop 10% and triggering a circuit breaker. Originally reported by BigGo Finance.
MSCI Downgrades Indonesia
MSCI proposed to downgrade Indonesia from emerging market to standalone market status on October 16.
Jakarta Stocks Plunge
Jakarta Composite Index dropped more than 10% triggering a 30-minute circuit breaker.
MSCI's Reason for Downgrade
MSCI cited suspected collusive trading and lack of enforcement as evidence of market failure.
Consultation Period
MSCI consultation period runs through April 30 next year with final decision by June 30.
Foreign Capital Outflow
Foreign investors net sold $4.9 billion in Indonesian equities this year.
Jakarta Composite Index Decline
Jakarta Composite Index fell 38% this year, lowest since November 2020.
Indonesia Stock Exchange Response
Indonesia Stock Exchange plans to request clarification from MSCI on reclassification criteria.
Reform Measures Implemented
Indonesia implemented enhanced disclosure requirements and a roadmap to 15% free float requirement.
FTSE Russell Status
FTSE Russell reaffirmed Indonesia's emerging market status, creating institutional assessment divide.
South Korean Market Impact
South Korean markets fell 7.57% as foreign investors net sold 356.9 billion won.
Investor Concerns
Investors warn of continued foreign selling pressure until Indonesia's status is finalized.
Market Correction Expected
Jakarta Composite Index could undergo deeper correction due to market volatility.
The bottom line
MSCI downgrades Indonesia to standalone market status, causing Jakarta stocks to drop 10% and triggering a circuit breaker.
