MSCI Warns Indonesia: Fix Stock Market or Face Downgrade

Global index provider MSCI has warned Indonesia that it could downgrade the country's stock market status, adding pressure on authorities to fix long-standing problems in how shares are traded. The warning centers on "triple selling," a practice that lets the same shares be sold through three separate channels at once. Critics say this makes trading data unclear and can mislead investors about how much stock is actually changing hands. An MSCI downgrade would matter far beyond Jakarta. Many global funds track MSCI indexes, so a lower status could push billions of dollars of foreign investment out of Indonesian stocks. A downgrade would also raise borrowing costs for Indonesian companies and weaken the rupiah. Indonesian officials say they are reviewing the rules and plan reforms. But investors remain cautious. Foreign inflows have slowed in recent weeks as funds wait to see whether the government acts before MSCI's next review. The outcome will test Indonesia's promise to deepen its financial markets and attract more foreign capital. For now, the message from MSCI is simple: fix the trading rules, or lose your place among the world's major markets.