IDX to Meet MSCI This Afternoon and Seek Clarification
Jakarta (ANTARA) – The Indonesia Stock Exchange (IDX) will hold an online meeting with global stock index provider Morgan Stanley Capital International (MSCI) on Monday (19 October) at 3.30pm Western Indonesian Time to seek clarification about its decision to place Indonesia’s capital market under consultation.
IDX President Director Jeffrey Hendrik said the meeting followed MSCI’s announcement on Friday morning (16 October), Indonesia time, which came as a surprise to the IDX, the Financial Services Authority (OJK), MSCI participants and global investors.
“We will have an online meeting with MSCI this afternoon. We immediately asked for time to meet with them. I will provide an update after the meeting,” Jeffrey told reporters at the IDX Media Room in Jakarta on Monday.
Jeffrey said the IDX and OJK had not previously known that the announcement was forthcoming, and described it as unexpected. Most MSCI participants and global investors in contact with the exchange were also surprised by the decision, he added.
Jeffrey said the announcement had prompted a reaction among market participants, causing panic and confusion amid what they viewed as heightened uncertainty.
To ease the panic and prevent investors from making decisions in uncertain conditions, the IDX adjusted the lower limit for an automatic trading halt triggered by falling share prices, known as Auto Rejection Bawah (ARB), from 15% to 7%.
Jeffrey acknowledged that the measure was unusual, but said it was introduced to give investors time to assess developments before making investment decisions. “We will review this policy, but based on our review from this morning until midday, it has been quite effective in easing panic,” he said.
The Jakarta Composite Index (JCI) was down about 5% by the close of the first trading session on Monday, and had therefore not reached the 7% ARB threshold.
The exchange hopes investors will consider developments carefully and reassess company fundamentals when making investment decisions, Jeffrey said.
He added that the IDX had monitored the situation from Friday through Sunday and held discussions with various parties, including market participants, to hear their views.
After its meeting with MSCI on Monday afternoon, the IDX will provide an update on the discussions, including clarification of the considerations behind MSCI’s decision to place Indonesia under consultation.
At the close of the first trading session on Monday, the JCI had fallen 261.85 points, or 5.05%, to 4,923.26.
Share trading recorded 850,000 transactions, involving 15.90 billion shares worth Rp10.01 trillion. Forty-three shares rose, 782 fell and 138 were unchanged.