Indonesian officials plan to meet with MSCI Inc. executives on Monday after being blindsided by the index provider's threat to reclassify the country as a standalone market — a much more severe step than expected during months of talks.
The Financial Services Authority and the Indonesia Stock Exchange will seek clarification on why MSCI put standalone status on the table and launched its consultation ahead of a review previously expected in November, according to people familiar with the matter.
In its announcement last week, MSCI warned that Indonesia's emerging-market status was in jeopardy, citing insufficient progress on addressing concerns over opaque shareholding structures and suspected coordinated trading. It said a move to frontier-market status wouldn't adequately reflect the depth of the problems and instead proposed moving Indonesia directly to standalone status, with a final decision due by the end of June.
FSA Chair Friderica Widyasari Dewi told a briefing in Jakarta that the escalation caught officials off guard, noting that just days before the announcement, MSCI representatives had expressed appreciation for Indonesia's reforms at a meeting in Bangkok. Bank Indonesia Deputy Governor Thomas Djiwandono expressed confidence in a positive outcome from MSCI come November.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing