Indonesian financial regulators and stock exchange officials have pledged to tackle concerns about their market after the index provider MSCI said it was considering a downgrade, the South China Morning Post reports.
MSCI announced on Friday that it had opened a formal consultation on whether to move Indonesia, Southeast Asia's biggest economy, from emerging-market to stand-alone status, a category that includes Argentina, Ukraine and Russia. It cited opaque ownership, highly concentrated shareholdings and coordinated trading. The announcement triggered a sharp fall in Indonesian shares.
On Monday, officials from the Indonesia Stock Exchange held an online meeting with MSCI to set out planned reforms, including removing stocks whose ownership is too concentrated. MSCI's final decision is expected by 30 June next year. A downgrade could lead index-tracking funds to pull money out of Indonesian shares.
Source: South China Morning Post
