-
Advertisement
Indonesia
This Week in AsiaEconomics

Exclusive | Indonesia’s top economic minister vows capital market reforms: ‘not merely because of MSCI’

Airlangga Hartarto also tells This Week in Asia that Indonesia is not on a nationalisation drive, but merely targeting illegal operations

Reading Time:4 minutes
Why you can trust SCMP
Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs, during an interview with This Week in Asia on Tuesday. Photo: Handout
Kolette Lim
Indonesia will press on with reforms of its capital markets and go after market manipulators with the full force of the law well ahead of a May deadline set by leading index MSCI, the country’s top economic minister, Airlangga Hartarto, has vowed.
A massive sell-off last Wednesday prompted the government to act, as investors exited after MSCI said it would stop making adjustments to Indonesian stocks, citing a lack of transparency in shareholding structures and concerns over coordinated trading actions.

It warned it would reclassify Indonesia from an emerging to frontier market status by May if it did not see improvements.

Indonesia’s coordinating minister for economic affairs Airlangga Hartarto (right) shares his views on capital market reforms with South China Morning Post executive managing editor Zuraidah Ibrahim. Photo: Handout
Indonesia’s coordinating minister for economic affairs Airlangga Hartarto (right) shares his views on capital market reforms with South China Morning Post executive managing editor Zuraidah Ibrahim. Photo: Handout

In an interview on Tuesday, Airlangga, the coordinating minister for economic affairs, told This Week in Asia: “The government has an earlier deadline than what MSCI is asking. The government is not acting merely because of MSCI.

Advertisement

“The government is acting because it is already mandated by the law, but it hasn’t been implemented … This is not only about the capital market. Market integrity is the proxy of the whole economy, that’s why the government made swift action.”

On Sunday, the country announced a series of reforms, including plans to double the minimum free float to 15 per cent, potentially getting sovereign wealth fund Danantara to help stabilise markets, and allowing pension and insurance funds to increase capital market exposure.

Indonesia’s top economic minister vows capital market reforms

Indonesia’s top economic minister vows capital market reforms

Airlangga said Indonesia should improve transparency by requiring the disclosure of shareholders with ownership stakes above 1 per cent.

Advertisement
Select Voice
Select Speed
1.00x