After a reshuffle in its financial regulatory system and the announcement of a series of reform measures, Indonesia's stock market suffered another sharp decline on the 2nd, with the Indonesian Composite Stock Price Index dropping by more than 5% at one point and market sentiment remaining under pressure.
According to Refinitiv data cited by China News Service, there were a total of 750 falling stocks, 140 stocks unchanged, and only 68 rising stocks that day. Most sectors moved lower, with the materials sector seeing the biggest drop, followed by consumer discretionary, real estate, and energy sectors.
Market participants believe that the latest sell-off was mainly triggered by a recent warning from Morgan Stanley Capital International (MSCI) regarding transparency issues in Indonesia's capital market. MSCI stated that if these issues are not effectively addressed, it may downgrade Indonesia's market rating as early as May.
On the 2nd, the Indonesian Financial Services Authority, the Indonesia Stock Exchange, and other relevant institutions held an online meeting with MSCI to communicate about capital market reform initiatives.
Previously, to stabilize market expectations, Indonesia launched a personnel reshuffle in its financial regulatory system, with several top officials resigning. The authorities also rolled out a package of capital market reform measures, aiming to stabilize market operations by improving the free float ratio and investment accessibility.
"Protecting investors and maintaining market stability are our top priorities," said Luhut, Chairman of the Indonesian National Economic Committee, in a public statement on the 2nd. He called on investors to remain calm and not let short-term market sentiment sway them. He emphasized that the government and regulatory agencies are focusing their current capital market reforms on strengthening investor protection and upholding market stability.