Indonesian President Prabowo Subianto's brother Hashim Djojohadikusumo sounded the alarm over the stock market's vulnerability, urging business leaders to stop "deep frying" stocks and mitigate MSCI risks. Speaking in Jakarta, Hashim, the president's special envoy and chairman of the Indonesian Chamber of Commerce advisory board, warned that foreign investment pullout could weaken the rupiah and increase foreign loan costs, threatening economic stability.
MSCI Inc. warned Indonesia's stock market could be downgraded to standalone status due to opaque ownership and coordinated trading risks. The benchmark index is down 41% this year, with regulators cracking down on market manipulation. After MSCI's Oct. 15 statement, Financial Services Authority sanctioned over a dozen entities.
Hashim addressed tycoons including Anindya Bakrie and Franky Widjaja, urging immediate cessation of "deep frying" - coordinated trading that artificially inflates prices. He warned a double MSCI downgrade could weaken the rupiah to 22,000 per dollar with severe political consequences.
He highlighted that 32.7 million Indonesian citizens hold brokerage accounts, but their portfolios have dropped in value, causing widespread dissatisfaction.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing