MSCI Ancam Down Casta Exchange RI, Hundreds Trillions of Foreign Fund Could Run · Global Voices

Indonesia's capital market has the potential to lose a huge stream of foreign funds if the global index agency of Morgan Stanley Capital International really lowers Indonesia's classification from the emerging market to the independent market.

Reuters, Tuesday (20 / 10 / 2026), foreign investor sales have directly led to the current out of the funds on Friday (16 / 10) yesterday, as soon as MSCI proposed a decline in Indonesian capital market status. That day the Combined Price Index (IHSG) was recorded down to 11.6%.

After Monday (19 / 10), IHSG was back to weak and shut down to 3.6%. The combined decline of these two days of trade is graver than any decline during the 1998 Asian financial crisis. Even the Garuda stock index was also recorded to reach the lowest point six years during the session.

Despite the recent decline of IHSG, Goldman Sachs estimates that the decline in Indonesian market classes in the MSCI index could trigger passive flow (Passive outflow) to US $5.6 billion or around Rp 100.8 trillion (assuming Rp urls 18,000 per US dollar).

While total investment funds are active that use the MSCI index as a quart also have the ownership of Indonesian stock taken over US $8 billion or Rp 144 trillion. Despite the final decisions related to the sale by the active fund manager depending on each investment strategy.

Meanwhile in other Reuben reports, a number of other banks estimate the decline of Indonesian classification by MSCI can trigger a passive current of US $3-6 billion or Rp 54-108 trillion.

While the JPMorgan giant banks estimate a massive number outflows at US $4.8 billion or Rp 86.4 trillion, and the UBS warns that active investors can withdraw additional funds for US $15 billion or Rp 270 trillion.

The government bond analyst from S & P Global Ratings, Rain Lin, says the MSCI proposal to change the market status of Indonesia is likely to cause additional capital flow out. But what's more alarming than this current of foreign funds coming out of it is the potential decline in investor levels of Indonesia.

"What's more alarming is the potential damage to investor trust and the risk of weakening sentiments in the government bonds market and direct foreign investments," obviously.