Indonesia bourse adds independent observers to concentrated-ownership panel in fresh bid to avert MSCI demotion

Indonesia’s stock exchange will add independent observers to the committee that decides which stocks have highly concentrated ownership, its chief said on Monday, in the latest step to answer MSCI’s warning that it could demote the country to standalone market status. (Reuters)

IDX chief Jeffrey Hendrik told a press conference the committee, previously staffed only by capital-market officials, will now include academics and F. Chapman Taylor, a former Capital Group partner now advising sovereign wealth fund Danantara, as a representative of foreign investors. (KLSE Screener)

The exchange will also open an investigation immediately when it detects possible attempts to manipulate share prices, where it previously only issued warnings.

Hasan Fawzi, the financial regulator’s capital-market supervisor, told the same press conference the exchange must refine its methodology for compiling the concentrated-ownership list and strengthen supervision, including identifying irregular transactions and detecting coordinated trading. The regulator will also extend until June 2027 a policy allowing share buybacks without approval from a general shareholders’ meeting.

MSCI said earlier this month it could move Indonesia from emerging to standalone status, saying not enough had been done to arrest coordinated trading — a step beyond its January warning of a downgrade to frontier status. The exchange said last week it would exclude high-concentration stocks, 80 companies, from its main Jakarta index from 2 November. The warning prompted Indonesia’s deepest two-day stock sell-off on record.