"The resignation of the Indonesia Stock Exchange's chief executive marked the first tangible consequence of MSCI Inc.'s reform demands, as policymakers rushed to roll out measures aimed at averting a downgrade and restoring confidence. Within hours of Iman Rachman stepping down on Friday, officials said they were preparing additional steps to support the market, including changes to the exchange's shareholding structure and higher caps on insurers' capital-market allocations."
"Sentiment had already begun to recover after regulators on Thursday outlined reform measures, including doubling minimum free float-the number of shares available for public trading-to 15% starting next month and possible market involvement by sovereign wealth fund Danantara. The efforts reflect a push by authorities to meet MSCI's demands for greater transparency-failure to do so by May risk cutting Indonesia's index weighting and even a downgrade to frontier status."
The Indonesia Stock Exchange chief executive resigned following MSCI's reform demands, triggering rapid policy responses aimed at supporting the market. Officials signaled changes to the exchange's shareholding structure and higher caps on insurers' capital-market allocations. Markets endured a volatile week after MSCI flagged transparency concerns, producing the worst two-day rout in nearly three decades before regulators intervened and the Jakarta Composite Index later rose. Regulators outlined reforms including doubling minimum free float to 15% and potential involvement by sovereign wealth fund Danantara. Several banks downgraded Indonesian equities, and authorities face a May deadline to satisfy MSCI or risk index weight cuts or a downgrade.
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