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Indonesian stocks extended their losses on Thursday after index provider MSCI warned on the market’s investability and of a potential reclassification that could threaten investor flows to the country.
The Jakarta Composite index fell as much as 10 per cent on Thursday after sliding 7.3 per cent on Wednesday. The declines triggered 30-minute trading halts on Wednesday and Thursday.
The index is down more than 15 per cent since Tuesday, when MSCI released a report saying it had found “fundamental investability issues” in the Indonesia Stock Exchange’s data feed of publicly traded shares.
The index provider said it would stop making adjustments to Indonesian securities in its indices, including adding stocks, and added that Indonesia could be reclassified from an emerging to a frontier market if no resolution was made by May.
