Hashim Says Prabowo Assigned Him to Help Address MSCI Downgrade Threat
President Prabowo Subianto has asked Hashim Djojohadikusumo to help Danantara CEO Rosan Roeslani and government officials respond to MSCI's proposed downgrade of Indonesia's equity market, Hashim said, warning that a loss of foreign investment could strain market funding.
Liquidity and investor confidence at risk
Hashim disclosed the assignment at the opening of Kadin's National Leadership Meeting in Jakarta on Thursday, October 29, 2026. He said the response needed to protect the stock market's credibility and sustain global investor confidence to keep selling pressure from spreading across Indonesian assets.
"I was asked by the president to help Mr Rosan and his colleagues in the government mitigate the problems we are facing with Morgan Stanley," he said.
MSCI is considering moving its Indonesia indexes from Emerging Market to Standalone Market status. Hashim warned that such a downgrade would force foreign investors to withdraw money from Indonesia, potentially disrupting domestic liquidity. "If we fail to mitigate the MSCI issue, the sources of funding for our capital market will become increasingly depleted," he said.
The risks could extend to the currency, Hashim told the meeting, according to Tribunnews. He warned that foreign withdrawals from stocks could push the rupiah to Rp 20,000-21,000 per U.S. dollar, with some estimates reaching Rp 22,000. He described that scenario as a potential disaster for Indonesia's economy.
Sell-off puts pressure on millions of investors
IDNFinancials reported that the downgrade threat sent the Jakarta Composite Index (JCI) down more than 15%, prompting a 30-minute trading halt. According to The Business Times, the October 16 sell-off was the largest one-day decline since January 1998 and left the index down more than 40% for the year. The rupiah also fell 0.5% to 18,027 per U.S. dollar.
A move to standalone status could bring up to another $5 billion in foreign outflows, Henry Wibowo, co-founder of Alphagate Capital and former chief Indonesia strategist at JPMorgan Chase, estimated in comments reported by The Business Times.
Hashim said the government faced more than 30 million investors dissatisfied with the turmoil surrounding MSCI's proposal. "That includes me. I also own shares in publicly listed companies, and I am dissatisfied," he said.
His investments include indirect stakes through the Arsari Group in PT Solusi Sinergi Digital Tbk (WIFI) and PT Indokripto Koin Semesta Tbk (COIN), according to IDNFinancials data.
Indonesia's investor base has continued to expand despite the correction. ANTARA News reported that the total number of capital-market investors rose 57.96% year-to-date to 32.17 million. At the end of September 2026, before the October sell-off, the JCI was at 6,071.14, a decline of 29.79% from the start of the year.
MSCI's concerns and Indonesia's response
MSCI said market participants had questioned whether Indonesian equities were sufficiently investable, pointing to persistently unclear shareholding structures and suspected coordinated trading. Their feedback also indicated that a downgrade to Frontier Markets would not adequately reflect the severity of the problems.
If Indonesia moves to standalone status, it would be the first Asia-Pacific market in that classification, The Business Times reported. MSCI's existing standalone markets include Argentina, Nigeria, Ukraine, Zimbabwe and Lebanon.
Indonesian authorities have announced reforms addressing MSCI's concerns. MSCI's announcement lists greater disclosure of shareholders owning more than 1%, more detailed investor classifications, High Shareholding Concentration (HSC) reporting and a roadmap toward a 15% minimum free float requirement. ANTARA News reported that OJK expanded its investor classification system from nine categories to 39.
Rosan, meanwhile, said on October 16 that Danantara was prepared to enter the market and viewed the correction as a long-term investment opportunity. According to ANTARA News, he cited banking shares trading at price-to-book ratios below one, along with opportunities in infrastructure and telecommunications.
Consultation runs through April 2027
MSCI opened the reclassification consultation on October 15, 2026. Market participants can submit feedback through April 30, 2027, and the index provider plans to announce its final decision no later than June 30, 2027. It may also publish an interim update on the feedback before the consultation ends.