Key facts
- MSCI proposed reclassifying Indonesia from emerging market to standalone market status.
- President Prabowo accused MSCI of attempting to "intimidate" Indonesia.
- The Jakarta Composite Index has fallen about 40% this year.
- Concerns cited include coordinated trading, high ownership concentration, and limited free float.
Indonesian President Prabowo Subianto has accused MSCI of attempting to "intimidate" the nation after the global index provider proposed downgrading Indonesia from emerging market to standalone market status due to transparency concerns. The Jakarta Composite Index has plunged approximately 15% over two days and about 40% year-to-date, making it one of the world's worst-performing indexes. MSCI cited issues including coordinated trading practices, high ownership concentration, and limited free float of shares. The Indonesian government has appealed to economic nationalism to restore confidence, but analysts suggest these appeals may not be sufficient. The Indonesia Stock Exchange announced measures to improve market transparency, including providing more information on small shareholders and removing highly concentrated stocks from the index.