From The Economic Times · Anupam Nagar · · 1m 10s
Indonesia Stock Exchange Meets MSCI After Downgrade Warning
Indonesia Stock Exchange to meet MSCI after downgrade warning triggers market rout.
In brief
Indonesia Stock Exchange to meet MSCI after downgrade warning triggers market rout. Indonesia's stock market fell 5% after MSCI warned it might lose emerging-market status, prompting the exchange to halve price decline limits to 7%. Originally reported by The Economic Times.
Indonesia Stock Exchange
Indonesia Stock Exchange management will meet MSCI on Monday to seek clarification over concerns that could lead the country's stock market to lose its emerging-market status.
Market Selloff
Indonesia's main stock index fell 5% on Monday, extending losses after suffering its worst trading session since 1998 on Friday.
MSCI Downgrade Warning
MSCI raised concerns about dysfunctions in Indonesia's equity market, including coordinated trading behaviour and shortcomings in the enforcement of market rules.
Market Impact
Indonesia lost $65 billion in market capitalisation on Friday alone, prompting the exchange to halve daily price decline limits to 7% on Monday.
Exchange Response
IDX Chief Executive Jeffrey Hendrik said the exchange, the Financial Services Authority and market participants had not anticipated the warning.
Next Steps
Upcoming discussions with MSCI are expected to help Indonesian officials better understand the concerns behind potential reclassification and steps needed to address them.
The essence
Indonesia's stock market fell 5% after MSCI warned it might lose emerging-market status, prompting the exchange to halve price decline limits to 7%.
