Consequently, as of Feb 10, the JCI sank around 10% from Jan 26, reflecting the impact of MSCI’s free-float concerns and Moody’s negative outlook.
On Jan 28, MSCI raised concerns about “investability issues” and data transparency in the Jakarta Composite Index (JCI). The index provider stated that if insufficient progress on transparency is achieved by May, it will reassess Indonesia’s market accessibility, sparking fears of a possible downgrade from emerging-market to frontier-market status.
In response, the Indonesia Stock Exchange has pledged to work closely with MSCI to improve data transparency, including plans to lift the minimum free float on stocks to 15% from 7.5%. Shortly after, on Feb 5, Moody’s followed suit by revising Indonesia’s sovereign credit rating outlook from “stable” to “negative”.
