MSCI’s index rebalance drops Indonesian stocks and rupiah hits record low

Six companies removed from global standard index including materials and energy majors The potential outflow from active and passive investors due to the stock exclusion is estimated at around US$1.7 billion. (Photo by Yuki Kohara) JAKARTA — Indonesian equities plummeted on Wednesday after an index provider removed six local companies from the domestic global standard index following a quarterly review and the weakening of the rupiah.The Jakarta Composite Index closed 1.98% lower at 6,723.32, while the rupiah weakened to an all-time low of 17,535 on the dollar. A total of 428 stocks weakened, weighing on the index. MSCI has retained its status for Indonesia in the emerging market category. The index provider also removed 6 stocks from the MSCI Global Standard Index and 13 Indonesian stocks from the MSCI Global Small Cap Index. Major companies such as Amman Mineral Internasional, Barito Renewables Energy, Chandra Asri Pacific and Sumber Alfaria Trijaya were downgraded to small cap index.This review leaves 11 Indonesian stocks in the MSCI Global Standard Index and 43 stocks in the MSCI Global Small Cap Index.

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