JAKARTA (Reuters): Indonesia will brief MSCI this week on progress with its capital market reforms, the Indonesian Stock Exchange (IDX) said on Monday, after a warning from the index provider wiped tens of billions of dollars off the country's equity market.
About $120 billion in market value has evaporated since MSCI late last month flagged concerns over ownership and transparency in Indonesian stocks.
Sentiment deteriorated further after Moody's last week cut its bond-rating outlook for Indonesia's government and companies to negative, accelerating capital outflows from Southeast Asia's biggest economy.
The IDX said in a statement it would hold a follow-up meeting with MSCI in the second week of February to discuss Indonesia's reform proposals. State news agency Antara reported the meeting will take place on Wednesday.
Bourse executives and financial regulators met MSCI virtually on February 2, during which Jakarta proposed disclosing names of shareholders with at least 1% ownership, offering more detailed investor classifications and doubling the minimum free float to address MSCI's concerns.
MSCI has not commented on the proposals, nor the meeting.
The IDX said it aimed to publish shareholder-disclosure data on its website this month. More granular investor classifications will be available by the end of March, which is also the deadline for regulations raising the minimum free float.
PENALTIES FOR COMPANIES
Financial regulator OJK said it had held "intensive discussions" with the World Bank on global best practices for capital-market reforms.
As part of its push to tighten enforcement, OJK said it had penalised several companies for inappropriate conduct, including freezing UOB Kay Hian Sekuritas' underwriting permit for a year over improper due diligence of clients before a 2019 initial public offering.
UOB Kay Hian Sekuritas did not immediately respond to an emailed request for comment.
Five senior officials at the bourse and OJK have resigned following the market selloff.
MSCI's warning and Moody's downgrade came amid mounting investor unease over central-bank independence and fiscal health as President Prabowo Subianto seeks to lift growth to 8% from 5%.
The rupiah hit a record low of 16,985 to the dollar last month after Prabowo nominated his nephew, Thomas Djiwandono, to a top central-bank job. Djiwandono was sworn in as deputy governor of Bank Indonesia on Monday. He previously served as vice finance minister.
The main stock index on Monday rebounded to rise 1.2%, while the rupiah firmed to 16,795 per dollar.
(Reporting by Stefanno Sulaiman and Ananda Teresia. Writing by Gayatri Suroyo. Editing by Martin Petty and Mark Potter) - Reuters
