JAKARTA - The weakening of the Composite Stock Price Index (IHSG) is associated with the MSCI report. This caused the IHSG to be temporarily frozen or trading halt after falling 8 percent.
The Minister of Investment and Industrialization/Head of BKPM and CEO of BPI Danantara, Rosan Roslani, assessed that the main problem was market transparency and accountability.
"This is the trigger from MSCI which issued a report. Our stock exchange is expected to be more transparent and this must be followed up immediately," he said at the Presidential Palace, Jakarta, Wednesday, January 28.
Rosan emphasized that this issue is not new. Evaluation needs to be carried out because MSCI is an important reference for global investors when placing funds in various countries. "The fundamentals of our companies are very good. But MSCI is a reference for global investors," he said.
Global index provider Morgan Stanley Capital International (MSCI) previously decided to temporarily suspend a number of changes to Indonesian stocks in its index calculations. This decision was taken because there are still concerns about the ownership structure of shares which are considered too concentrated and limited market access for global investors.
MSCI also stated that it would stop adding Indonesian stocks to the index and freeze the increase in the weight of stocks that are considered available for trading. This step is temporary as a risk mitigation, while waiting for improvements from the Indonesian capital market regulator.
On the other hand, PT Bursa Efek Indonesia (BEI) implemented a temporary freeze on stock trading or trading halt. The policy was taken after the JCI fell 8 percent to 8,261.7 on the same trading day.
BEI calls this step a response to the decline in the index which has reached the threshold. Trading halt is carried out to keep trading orderly, reasonable, and efficient according to exchange rules.
Rosan emphasized that improvements must be made immediately so that market confidence is maintained. The focus is not on the performance of issuers, but on market governance.
When asked about the textile BUMN, he did not comment because he had just returned from a trip and would discuss it in a meeting. The same thing was said when asked about Danantara's plans to enter the market. "Later, one by one," he said.
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