Singaporean State Investors Deny Instigating Indonesian Stock Collapse
Temasek and GIC denied allegations that they pressured MSCI to downgrade Indonesia's market status to trigger a stock market collapse for discounted asset purchases.
Singaporean state-owned investors Temasek Holdings (Private) Limited and GIC have denied allegations that they orchestrated a collapse of the Indonesian stock market. Former Indonesian trade minister Muhammad Lutfi claimed via social media that the firms pressured MSCI to threaten a downgrade of Indonesia's market status to stand-alone market status, intending to create mass panic and purchase prime assets at discounted prices.
The accusations follow a significant stock rout, the steepest since the Asian financial crisis, triggered by an announcement from MSCI. The index provider stated it expects to remove Indonesia from its global indices unless market governance improves.
Both Singaporean firms stated the claims are untrue and have no basis. GIC specified that its investment decisions are driven by company and asset-level fundamentals rather than index classifications. In an effort to prevent the downgrade, the Indonesia Stock Exchange announced it will remove companies with highly concentrated ownership from its benchmark index calculation.
