SINGAPORE: Index provider FTSE Russell has postponed a scheduled review for Indonesia, due to uncertainty about how freely stocks trade, in a fresh blow for markets in South-East Asia’s biggest economy which are facing criticism over trading and transparency.
About US$120bil has been wiped out from the benchmark Jakarta Composite after larger rival MSCI warned last month the country risked a downgrade to frontier status. Moody’s cut its credit rating outlook last week.
FTSE Russell said in a statement on Monday that it will postpone a review planned for March following feedback from an advisory committee comprising of investment professionals and considering “adverse turnover and the uncertainty in determining the accurate free float percentages of Indonesian securities”.
With immediate effect, it said, newly listed Indonesian stocks will not be added to its products.
It added that neither would they be updated to reflect other additions, deletions or changes in weighting that usually form part of regular index reviews. — Bloomberg
