If Indonesia is downgraded by MSCI, foreign flows could shift to other Southeast
Asian markets including Malaysia, Hong Leong Investment Bank analyst Jeremy Goh
says. He warns a weaker Indonesian market could challenge Malaysian firms
holding stakes in Indonesian listed companies, especially for fundraising and
asset disposals, but says MSCI-related risks are largely idiosyncratic to
Indonesia and unlikely to be systemic for Malaysia. Hong Leong maintains a
year-end Kuala Lumpur Composite Index (KLCI) target of 1,720. The KLCI fell 0.2%
to 1,583.23 intraday.
