MSCI Inc. has flagged further concerns about Indonesia’s market, raising the risk of a downgrade from emerging-market to frontier-market status. The global index provider cited limited transparency of shareholding structures and indications of coordinated trading that undermine proper pricing, downgrading Indonesia’s information flow criterion to negative. This comes ahead of MSCI’s decision next week, with analysts warning a demotion could spur heavy capital outflows and push the dollar above 18,000 rupiah. The Jakarta Composite Index has slumped 29% this year, last trading 0.6% lower at 6132.58, while the rupiah has been one of Asia’s worst-performing currencies despite central bank intervention. Authorities have rolled out reforms such as doubling the minimum free-float requirement to 15% of total shares, but analysts say more is needed to restore confidence.
MSCI IncMSCI flagged concerns about Indonesia's market, raising risk of downgrade, which could affect its index business.