Goldman Sachs Warns: Potential Billions in Indonesian Equity Outflows Amid MSCI Concerns

Goldman Sachs downgraded Indonesian equities, predicting billions in potential outflows after MSCI highlighted transparency issues. The Jakarta Composite Index plummeted, with calls for caution from Goldman strategists who foresee continued market pressure. MSCI's warning adds to challenges like fiscal deficit worries and foreign investor sell-offs.

Goldman Sachs revised its rating on Indonesian equities to 'underweight' from 'market weight', citing concerns over potential outflows following MSCI's transparency issues warning.

The Jakarta Composite Index fell 7.4% after MSCI announced it would halt updates on Indonesian securities. Goldman warns that the market may remain under pressure.

This development amplifies Indonesia's existing challenges, including foreign investment outflows and fiscal deficit concerns, with experts cautioning about the negative economic impacts of increased capital risk premiums.

(With inputs from agencies.)