Indonesian stocks sink to 6-year low on MSCI downgrade threat
Why it matters: Goldman Sachs estimated a full MSCI removal could force about $5.6 billion in passive outflows from Indonesian equities.
Indonesian stocks fell more than 5% Monday, pushing the Jakarta Composite Index to its lowest level in six years, after MSCI warned it could shift the market from emerging-market status to standalone. The sell-off followed an 11.6% plunge on Friday, the benchmark’s worst day since 1998, and sharpened fears that Indonesia could be cut out of major global equity indexes. Goldman Sachs estimated a full MSCI removal could trigger about $5.6 billion in passive outflows, with another $2.7 billion at risk in a separate FTSE Russell scenario. The Indonesia Stock Exchange said it would meet MSCI on Monday and cut its daily lower auto-rejection limit to 7% from 15% to curb volatility.