Indonesia is reducing its minimum share price from Rp50 to Rp1 to stimulate trading in its struggling stock market. The change, effective Monday, aims to improve liquidity and price discovery as Jakarta seeks to avoid a downgrade by MSCI. The benchmark index has lost over 25% of its value this year.

The move follows a January warning from MSCI citing transparency issues and share price manipulation. President Prabowo Subianto's policies have also weighed on sentiment. Go To, the ride-hailing and food delivery start-up, is among the companies expected to see significant price drops.

Once valued at $28 billion with a debut price of Rp338, its shares have been stuck at the floor price of Rp50 since May. Go To was removed from MSCI indices this year. Other companies linked to Indonesia's richest tycoons have also been deleted.

While BNP Paribas' Ernest Chew believes the rule could foster positive sentiment by reflecting fundamentals, Lombard Odier's Homin Lee notes sour sentiment. Allspring's Gary Tan expects only modest, one-off liquidity improvements, noting most affected companies are distressed or illiquid. Indonesia's stock exchange has not yet commented on the changes.