STOCKS | Hashim Djojohadikusumo: MSCI’s Indonesia Downgrade Threat Goes Too Far

Hashim Djojohadikusumo, an influential Indonesian business tycoon and adviser to President Prabowo Subianto, called MSCI’s threat to downgrade Indonesia to standalone market status unfair and excessive. According to Sina Finance, Hashim said Indonesia deserves a higher classification; MSCI has cited concerns including suspected stock manipulation, weak regulatory enforcement, lack of transparency and concentrated ownership. A downgrade would remove Indonesia from MSCI’s major indexes and could force index-tracking funds to sell Indonesian stocks. Goldman Sachs estimated that outflows could exceed $5 billion. Indonesia’s stock market has fallen 40% this year amid repeated MSCI warnings and concerns about Prabowo’s policies. MSCI said market participants have not seen sufficient sustained improvement despite announced reforms, and that significant risks remain, including suspected coordinated trading and a lack of substantive enforcement. Jakarta has tightened free-float requirements and removed stocks with highly concentrated ownership from core indexes. MSCI expects to make a final decision by June 2027. Hashim said a downgrade could also pressure the rupiah.