Indonesian stocks suffer worst fall since 1998 after MSCI reclassification warning
publishers 13articles 13first reported 16 Oct, 03:43 UTCdeveloping since 16 Oct · 11 editions
Indonesian stocks recorded their steepest one-day decline since 1998 on Friday after MSCI said the country’s continued classification as an emerging market was no longer appropriate and proposed moving it to standalone status.
The Jakarta Composite Index fell 8% at the open, triggering a trading halt, and closed down 11.6%. About $60 billion in market value was erased, while the rupiah weakened as much as 0.8% to 18,070 per dollar before recovering some ground.
MSCI launched a consultation on the proposed reclassification, saying reforms announced by Indonesian authorities had not produced sufficient, consistent progress. It cited opaque shareholding structures, suspected coordinated trading and a lack of evidence of meaningful enforcement. MSCI said frontier-market status would not adequately reflect the severity of the problems. A final decision is expected in June 2027 unless market governance materially improves.
Moving Indonesia to standalone status would remove its shares from MSCI global indexes followed by passive funds. UBS estimated the change could produce about $4 billion in passive outflows and potentially another $15 billion from active investors. Mirae Asset Sekuritas Indonesia estimated passive outflows of about $3 billion.
Indonesia’s stock exchange said it would seek clarification from MSCI and pointed to reforms intended to strengthen transparency and market integrity. The financial regulator said it was reviewing MSCI’s assessment and announced sanctions against parties linked to alleged manipulation involving shares of three companies.
HOW THIS STORY WAS MADE
Written from 8 articles, 3 with the publisher's own text; 8 independent newsrooms once syndicated copies count as one; this version written 16 h after the record first saw the story; the editor kept it as written.
- Publishers
- 13
- Source articles
- 13
- Given to the writer
- 8, 3 with the article's own text
- Independent newsrooms
- 8
- This version written
- 16 h after the record first saw the story
- Second model (editor)
- kept as written
- Publication gate
- passed
- Human review
- none
WHAT THE EDITOR DID
The second model checked the writer's draft against the same sources and published it as written.
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