Indonesia Sell-Off Erases $82 Billion Amid MSCI Warning

MSCI is considering downgrading Indonesia from emerging-market to standalone status, citing opaque share ownership, coordinated trading and weak market oversight—concerns the index provider says require effective enforcement, not just new regulations. The proposal rattled investors and contributed to a steep sell-off in Indonesian stocks, with a downgrade potentially prompting funds that track emerging-market indexes to sell Indonesian holdings. President Prabowo Subianto rejected the warning as intimidation, saying Indonesia would not be pressured by outside parties. Indonesian exchange officials have announced steps to improve transparency, including disclosing more information about smaller shareholders and excluding highly concentrated stocks from the benchmark index.