MSCI said Indonesia no longer meets Emerging Markets eligibility and proposed removing the country from its widely followed suite of indices, a change that could prompt sizable portfolio outflows. Angus Mackintosh, ASEAN markets specialist at Alethia Capital, called the move overly severe given steps Indonesia has taken to address market transparency and free-float, saying MSCI’s case rests on insufficient evidence those reforms are implemented and on a failure to sanction participants in appare

MSCI said Indonesia no longer meets Emerging Markets eligibility and proposed removing the country from its widely followed suite of indices, a change that could prompt sizable portfolio outflows. Angus Mackintosh, ASEAN markets specialist at Alethia Capital, called the move overly severe given steps Indonesia has taken to address market transparency and free-float, saying MSCI’s case rests on insufficient evidence those reforms are implemented and on a failure to sanction participants in apparent price manipulation. Mackintosh added Indonesia can only reverse the decision by imposing strict sanctions and fines on those involved in collusive manipulation, and that grouping Indonesia with markets such as Lebanon, Palestine and Argentina misrepresents the operating condition of most listed companies.