Prabowo accuses MSCI of trying to intimidate Indonesia after market rout
MSCI•President Prabowo Subianto accused MSCI of trying to intimidate Indonesia after its warning that it could demote the country’s equities to standalone market status triggered a record two-day stock market rout. MSCI said its decisions follow transparent, rules-based methodologies.
1. Prabowo responds to warning
Prabowo told his cabinet that MSCI intended to intimidate Indonesia, saying the country would not be cowed. MSCI had warned it could demote Indonesian equities to standalone market status, citing concerns that the country had not done enough to curb coordinated trading practices.
2. Market reaction and concerns
The warning triggered a record-breaking two-day stock market rout. A downgrade could cause major capital flight and cut the $1.5 trillion G20 economy off from major emerging-market index flows.
3. MSCI says it will monitor developments
MSCI said it would continue to monitor developments in the Indonesian market and engage with market participants and authorities. Indonesian political figures have questioned the basis and transparency of the possible downgrade; Temasek and GIC rejected a former trade minister’s claim that they pressured MSCI to issue its warning.
