Holy shit. Indonesia's stock exchange voted today...
The committee needed to decide which stocks count as "highly concentrated," to kick out.
They've chosen 80 NAMES which will now INCLUDE independent parties.
Basically until now its members were officials from the capital market authorities, and the 'independents' are Indonesian academics, and F. Champman Taylor, a former partner at Capital Group who "is currently an adviser to Indonesia's sovereign wealth fund, Danantara."
He was the representative of foreign investors btw.
Basically what is happening is this: Danantara is Indonesia's poor attempt of a sovereign wealth fund, they hold company stakes. And the 80 names are shells where a crime syndicate owns almost EVERYTHING (which is what MSCI doesn't like).
The committee then decides WHICH COMPANIES are shells - and the foreign investors' independent voice on this also works for the biggest shareholder in the market.
Essentially, from November the exchange will investigate suspected coordinated trading and can FREEZE investor accounts at will. THEN buybacks without shareholder votes will continue to June 2027.
In plain english: the state's adviser will help pick the list, then the exchange can freeze whomever they think is a culprit, and boards can buyback without asking.
This is quite literally just a scheme to hold the index up.
Do you seriously think MSCI is that naive?
Nothing will save Indonesia until they rid the corruption.
🚨 BREAKING: ABSOLUTE BLOODBATH!!
🇮🇩 OVER Rp2.000.000.000.000 HAS BEEN WIPED OUT OF THE INDONESIAN STOCK MARKET RIGHT AFTER THE OPEN!
MSCI OFFICIALLY WARNS INDONESIA WILL BE REMOVED FROM ITS INDICES IF THE DUMP CONTINUES.
THIS IS VERY BAD NEWS FOR GLOBAL MARKETS…