Hashim warns potential MSCI downgrade could drain Indonesian market funds
The Kadin advisory board chairman said a shift to standalone market status could force foreign funds to withdraw and put pressure on the rupiah.
Indonesia could face forced foreign fund withdrawals if MSCI reclassifies its stock market from emerging to standalone status, Kadin advisory board chairman Hashim Sujono Djojohadikusumo warned in Jakarta on 29 October 2026.
Speaking at the opening of Kadin’s 2026 national leadership meeting, Hashim urged action to address the potential downgrade. He said failing to mitigate the risk could leave Indonesia’s capital market with dwindling funding sources, describing an apparent weakening of foreign investor confidence as a serious problem.
Hashim said indications of share-price manipulation were among the issues drawing scrutiny from MSCI and foreign investors. He pointed to reduced free floats and price-to-earnings ratios that he considered unreasonable, but did not identify any companies, stocks or individuals.
He also warned that an exit of foreign investment from Indonesian equities could weaken the rupiah and make overseas borrowing more expensive. Hashim said the consequences could extend to politics, and called for the market concerns to be addressed before they became uncontrollable.
