Indonesian Stocks Plunge Amid Market Status Downgrade Fears

Indonesian stocks are experiencing a significant decline as fears of a reclassification to frontier market status loom. This follows warnings from MSCI about market transparency issues and worsens with the economic policies of President Prabowo Subianto. Foreign investors continue to withdraw from the market.

Indonesian stocks plunged dramatically as fears of a downgrade to frontier market status gripped investors, prompting a rush to sell. The Jakarta Composite Index fell 8%, leading to a temporary trading halt.

MSCI's warning regarding market transparency issues compounds the challenges faced by Southeast Asia's largest economy, which is already grappling with foreign capital outflows due to economic policies under President Prabowo Subianto.

The uncertainty is further aggravated by Goldman Sachs' downgrade of Indonesian equities to 'underweight', with potential outflows forecasted to reach up to $7.8 billion.