Indonesia's stock market rebounded after authorities unveiled measures aimed at
averting a potential two-notch downgrade by MSCI. The Jakarta Composite Index
rose as much as 2.7%, recouping part of an about 15% decline over the prior two
sessions — the steepest sell-off since 1989 and leaving Indonesia the world's
worst-performing market. The Indonesia Stock Exchange said after a Monday
meeting with MSCI representatives it will exclude companies with highly
concentrated ownership from its benchmark sample and expand ownership
disclosure, requiring clarity on whether investors holding 1% or more are
related parties. MSCI has said it is considering downgrading Indonesia from an
emerging to a standalone market — a step more severe than January's warning to
possibly reclassify it as a frontier market —citing opaque ownership
structures, suspected coordinated trading and insufficient progress on this
year's regulatory reforms.
