Indonesia Stocks Sink 11% as MSCI Opens Reclassification Review
The index provider is consulting on moving Indonesia out of emerging-market status, raising the prospect of fund outflows.
Key takeaways
- The Jakarta Composite Index fell 11.1% after an opening trading halt.
- MSCI is consulting on a proposal to reclassify Indonesia as a Standalone Market.
Indonesia’s Jakarta Composite Index fell 11.1% on Friday after dropping 8% at the open, which triggered a trading halt. It was the index’s steepest fall since early 1998, according to CNA.
MSCI said it was consulting on a proposal to reclassify Indonesia as a Standalone Market, saying it had not seen consistent progress across the equity market. The index provider cited concerns about suspected coordinated trading and a lack of evidence of meaningful enforcement.
A reclassification could prompt funds tracking MSCI emerging-market indexes to sell Indonesian holdings. Indonesian authorities said in April they had completed reforms aimed at avoiding a downgrade.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
