Indonesia stocks crash to six-year low as MSCI expulsion warning triggers record rout
The Jakarta Composite Index fell over 5% to its lowest since September 2020 on Monday after MSCI warned it could shift Indonesia to standalone status, capping a record two-day rout that has foreign investors fleeing.
Indonesia’s benchmark stock index crashed to a six-year low on Monday as a record two-day rout followed MSCI’s warning it may expel the country from its emerging-market indexes, cutting Southeast Asia’s biggest economy off from international capital. (Straits Times)
The Jakarta Composite Index fell over 5% to a low of 4,907.37 — its lowest since September 2020 — before closing at 4,996.61, down 188.50 points or 3.6%, after the Indonesia Stock Exchange halved its lower auto-rejection limit to 7% from 15% to curb panic selling. (Nikkei Asia)
Friday had already produced the benchmark’s biggest one-day fall in nearly three decades: an 8.01% slide shortly after the open triggered a trading halt, and it closed down 11.6%. (Reuters)
MSCI said on October 16 it may move Indonesia to “standalone” status — a group including Lebanon and Zimbabwe — over ownership opacity and trading behaviour, going beyond January’s threatened “frontier” downgrade. (CNA)
The rupiah weakened to 18,048 per dollar, near June’s 18,190 record low, while the 10-year bond yield jumped to 7.4% from 7.169%. Goldman Sachs estimates a full MSCI removal could trigger $5.6bn of passive outflows; foreign investors have net sold $4.88bn this year, on track for the biggest annual outflow in at least 16 years, down 40% this year. (Business Times)
IDX chief executive Jeffrey Hendrik called the MSCI announcement “unexpected to us, causing a market panic”. President Prabowo Subianto was expected to meet financial officials on Monday afternoon on the “current economic condition”, two government sources said.
More on this topic: all Business stories
