Indonesian Shares Plunge as Foreign Analysts Issue Warning
SINGAPORE — Indonesian shares fell to a six-year low on Monday (19 October 2026). A warning from MSCI that it could remove Indonesia from its global indices next year shook investor sentiment, which was already considered fragile.
According to Channel News Asia, Jakarta’s benchmark share index plunged by more than 5 per cent at the start of trading on Monday, following an 11.6 per cent fall on Friday.
Indonesia’s stock market recorded the worst performance worldwide after MSCI said it was considering changing Indonesia’s status from an emerging market to a standalone market.
A downgrade to ‘standalone market’ status risks cutting Southeast Asia’s largest economy off from international capital. Indonesia’s stock exchange could be sidelined by global investors, placing it alongside standalone markets such as Lebanon and Zimbabwe.
“Our main concern is not simply index-driven selling,” Gary Tan, a portfolio manager at Allspring Global Investments in Singapore, told CNA.
“Rather, it is the potential short-term spillover into the rupiah and domestic bond yields. Such market dislocations could lead to tighter financial conditions, which would ultimately have a more tangible impact on the real economy.”
On Monday, the Indonesia Stock Exchange said it had lowered the auto-rejection limit from 15 per cent to 7 per cent. The measure is intended to give investors time to assess and digest available information, helping them make better investment decisions based on Indonesia’s economic fundamentals.
The policy followed a weekend meeting between financial-sector regulators and capital-market participants, including analysts and economists.
On Friday, Indonesian regulators also announced sanctions over alleged share-trading manipulation at three companies, with total fines of Rp2.1 trillion (US$116.4 million).
Angus Mackintosh, an ASEAN specialist at Singapore-based Aletheia Capital, said Friday’s announcement of the fines indicated that the Financial Services Authority (OJK) had been dealing with the issue for some time.
“The fines are a positive step, but coordinated action is needed to reaffirm the OJK’s authority and take firm action against specific parties widely known to be involved in market abuse,” he said.