Franklin Templeton CEO Jenny Johnson said the MSCI warning to Indonesia will be constructive, giving extra impetus for the country to improve governance and transparency in its equities market. “It was shot across the bow by MSCI that hey, we want transparency, we want good corporate governance, we expect these things in your economy,” she said in a Bloomberg TV interview in Hong Kong. “Hopefully there is a response to that.”
The country’s $1.4 trillion economy was thrust into focus by global investors after MSCI last month declared efforts to fix problems were proving so insufficient that it could suffer a two-notch downgrade to an investing category occupied by the likes of Zimbabwe and Lebanon. That threatens to push billions of dollars out of the country. MSCI has repeatedly raised concerns about opaque ownership and the potential for coordinated trading in Indonesia — one of Southeast Asia’s biggest equity markets — while pressing authorities to strengthen regulation, surveillance and enforcement.
“It’ll be interesting to see how Indonesia responds,” she said, speaking on the sidelines of the HKMA Global Financial Leaders’ Investment Summit in Hong Kong on Tuesday. “I actually think it’s kind of constructive,” adding that “government policies matter, corporate governance matters.”
Source: Bloomberg Markets · Summarized by HeadlinesBriefing