Indonesia moves to allay investor fears

Indonesian stocks staged a modest recovery yesterday as the country’s regulators unveiled several measures to allay investor fears after a deep rout triggered by the risk of a downgrade to frontier market status sapped already fragile sentiment.

- ANKUR BANERJEE STEFANNO SULAIMAN

A money changer counts Indonesian rupiah banknotes in Jakarta in 2018.REUTERS

(REUTERS)

Authorities in Southeast Asia's largest economy sought to address concerns raised by index provider MSCI, with Indonesia's financial regulator indicating it would double the free-float requirement for listed firms to 15% as part of its response.

The benchmark Jakarta Composite Index cut losses to trade down 1.7% from an earlier slide of 8% — which triggered a trading halt — following Wednesday's 7.4% tumble.

The rupiah was 0.4% softer at 16,770 against the dollar, just below last week's record low of 16,985.

Speaking at a news conference, Mahendra Siregar, head of the Financial Services Authority, said communication with MSCI had been positive and it was awaiting a response to its proposed measures, which he hoped could be implemented soon with the issues resolved by March.

“This is an ongoing process, not a single announcement,’ said Mohit Mirpuri, a portfolio manager at SGMC Capital in Singapore. “What investors needed to see was alignment and intent, and that was clearly delivered.”