Indonesia strengthens measures against stock manipulation after market rout triggered by MSCI

Indonesian President Prabowo Subianto told his Cabinet last week that MSCI was trying to "intimidate" Indonesia, but said the country would not be afraid.

Workers walk past an electronic board displaying stock movement at the Indonesia Stock Exchange (IDX) in Jakarta, Indonesia on Oct 16, 2026. (Photo: Reuters/Ajeng Dinar Ulfiana)

JAKARTA: Indonesia on Monday (Oct 26) introduced more measures to address stock market manipulation, including adding independent parties to a committee determining stocks with concentrated ownership structures, after MSCI said the country could be demoted due to concerns about opaque trading.

The measures came after MSCI announced earlier this month that it could demote Indonesia's stock exchange to "standalone" market status, saying not enough had been done to arrest coordinated trading practices in its stock market.

That was more severe than the global index provider's January warning that it could downgrade the country to "frontier" status. At present, MSCI still classifies Indonesia as an "emerging" market.

The Indonesia Stock Exchange (IDX) plans to expand the membership of a committee that comes up with a list of stocks with high shareholder concentration to include independent parties like Indonesian academics and F Chapman Taylor as a representative of foreign investors, chief Jeffrey Hendrik said at a press conference.

CNA Games Guess Word Crack the word, one row at a time Buzzword Create words using the given letters Mini Sudoku Tiny puzzle, mighty brain teaser Mini Crossword Small grid, big challenge Word Search Spot as many words as you can Show More Show Less Previously, the committee members were officials from capital market authorities. Taylor is a former partner with investment company the Capital Group and is currently an adviser to Indonesia's sovereign wealth fund, Danantara.

"We encourage the IDX to strengthen the mechanism and methodology of trading supervision, including its capacity to identify patterns of irregular transactions, detect coordinated trading and strengthen the mechanism to respond to such events," said Hasan Fawzi, the financial regulator's capital market supervisor.

Last week, the IDX said it would exclude stocks with high shareholding concentrations from its main Jakarta index starting on Nov 2. The current list includes 80 companies.

The MSCI downgrade warning spurred Indonesia's deepest-ever two-day stock selloff on Oct 16 and Oct 19, sending the main index to its lowest point since 2020. It has since rebounded.