JAKARTA: S&P Dow Jones Indices (DJI) has put Indonesia on a watch list for a potential downgrade to frontier market status in its next annual review in 2027.
The New York-based global index provider issued the warning in an announcement on Tuesday, adding it was continuing to monitor developments related to stock ownership transparency and guidance from the Indonesia Stock Exchange (IDX) to address disclosure-related concerns and potential liquidity impact in the country.
“If circumstances worsen, S&P DJI may consider implementing special treatment for Indonesian securities,” read the announcement.
The index provider added that if these matters remained unresolved one calendar year from the date that special measures were introduced, Indonesia’s market classification was set to be assessed at the 2027 annual review.
Newly appointed IDX president director Jeffrey Hendrik said the exchange would conduct “constructive communications and discussions” with S&P DJI to understand its concerns and evaluations.
“Together with the Financial Services Authority and all stakeholders, IDX will continue to take various measures to address existing concerns”.
“The exchange is committed to taking various efforts to improve transparency and ensure a fair, orderly and efficient capital market,” he said.
The IDX Composite index fell as much as 1.4% to 5,903.23 points during the first trading session on July 8.
The benchmark index has plunged more than 30% since the beginning of the year, making it one of the worst-performing markets in Asia. However, its latest decline was in line with losses in other major markets. — The Jakarta Post/ANN