Prabowo Accuses MSCI of Intimidation Amid Indonesian Stock Rout

President Prabowo Subianto accused global index provider MSCI of attempting to intimidate Indonesia after the firm warned it could demote the country's equities to standalone market status. The potential downgrade, cited by MSCI as a result of insufficient efforts to curb coordinated trading practices, triggered a record-breaking two-day stock market rout, the steepest decline since the Asian financial crisis.

Prabowo declared that the Indonesian nation fears no one and will not be cowed. MSCI responded that its decisions follow transparent, rules-based methodologies and that it will continue to monitor developments in the Indonesian market. To prevent the downgrade, the Indonesia Stock Exchange announced it will remove companies with highly concentrated ownership from its benchmark index calculation.

Amid the volatility, former Indonesian trade minister Muhammad Lutfi alleged that Singaporean state-owned investors Temasek and the Government of Singapore Investment Corporation (GIC) pressured MSCI to issue the warning to create mass panic and purchase prime assets at discounted prices. Both Temasek and the Government of Singapore Investment Corporation (GIC) rejected these claims as baseless and untrue, with the Government of Singapore Investment Corporation (GIC) stating its investment decisions are driven by asset-level fundamentals rather than index classifications.