Indonesian Stocks Tumble to Lowest Since 2020 After MSCI Warning
What happened
- Indonesia’s benchmark stock index fell over 5% to its lowest level since early October 2020 as MSCI downgrade fears intensified.
- MSCI proposed reclassifying Indonesia from emerging-market to standalone status, potentially removing Indonesian equities from major global benchmarks.
- Authorities plan measures including excluding tightly owned stocks from the benchmark, while Bank Indonesia faces pressure to raise rates.
Why it matters
The potential MSCI reclassification could accelerate foreign outflows, pressure the rupiah and bonds, and affect equity, credit and capital-markets investors. Authorities’ response and possible rate hikes are key to market stability and future index eligibility.
What to watch. MSCI is expected to make a final decision by June; Indonesian officials also plan to meet MSCI executives on Monday, while Bank Indonesia’s rate decision faces increased scrutiny on Wednesday.
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Timeline
- EarlierOct 18Tokenized stock trading takes off overseas as Goldman, other U.S. companies object
- First reported by BloombergOct 19Indonesian Stocks Tumble to Lowest Since 2020 After MSCI Warning
- CNBC reportsOct 19Indonesian stocks plunge to six-year low as MSCI downgrade fears mount
- Financial Times reportsOct 19Indonesia expels tightly held companies from Jakarta index in bid to avoid MSCI downgrade
- The Wall Street Journal reportsOct 23Indonesia’s Sovereign Fund Sticks With Investment Strategy After MSCI Warning
Who is involved
Sources (4)
- BloombergOct 19Indonesian Stocks Tumble to Lowest Since 2020 After MSCI Warning
- CNBCOct 19Indonesian stocks plunge to six-year low as MSCI downgrade fears mount
- Financial TimesOct 19Indonesia expels tightly held companies from Jakarta index in bid to avoid MSCI downgrade
- The Wall Street JournalOct 23Indonesia’s Sovereign Fund Sticks With Investment Strategy After MSCI Warning
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