Shares of Indonesia’s large banks and LQ45 index constituents fell sharply on the Indonesia Stock Exchange in morning trading on Friday, after MSCI said it would downgrade Indonesia’s equity market status from emerging market to standalone market and opened consultation on the proposal. The LQ45 index fell 12.90 percent during trading.
Bank Central Asia shares dropped 14.81 percent intraday to 5,175 rupiah per share. Bank Rakyat Indonesia fell 10.65 percent to 2,770 rupiah, Bank Mandiri lost 9.30 percent to 3,510 rupiah, and Bank Negara Indonesia slid 12.61 percent to 2,980 rupiah.
Concerns over investability and governance
MSCI said it considers Indonesia’s classification as an emerging market no longer appropriate and opened consultation on reclassifying the country as a standalone market. The index provider cited continuing concerns over investability and stock market governance, including non-transparent ownership structures, shareholding concentration and suspected coordinated trading.
MSCI had warned in June that Indonesia could face reclassification if market accessibility issues persisted. It has also kept freezing several changes related to Indonesian stock indices until further notice.
Broader index losses
The Jakarta Composite Index fell 10.80 percent to 5,230 points at 09.40 WIB, after the exchange had halted trading at the open. The index had already dropped 8.01 percent at the prior close, to 5,393 points.
Also Read
By 09.40 WIB, 689 stocks were falling and market capitalisation stood at 9,271 trillion rupiah, down from 10,298 trillion rupiah on Thursday. The consultation runs until April 30, 2027, and MSCI’s final decision is due by June 30, 2027.
Related: Jakarta stocks slump as MSCI weighs Indonesia market downgrade · Indonesian stocks climb 0.64% ahead of central bank rate move
Source: MSCI
