Jakarta's rescue, Manila's record: Southeast Asia's trust test

<p><em>Special Reporting from LSN News, adapted from today's Asia Money Map episode. <a href="https://youtu.be/0jHn4QjTGi8" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>Eighty-two billion dollars. That is how much value Indonesia's stock market lost in a record two-day rout, Reuters reports, after index provider MSCI warned it could push the country out of the emerging-market club. On Tuesday, Jakarta bounced back hard. The same day in Manila, the owner of GCash made the biggest stock market debut in Philippine history. Together they tell one story about trust, and about why Bank Indonesia's decision today matters far beyond Jakarta.</p>

<h2>Jakarta's rescue rally</h2>

<p>The Jakarta Composite Index closed up 5.65% on Tuesday, at about 5,279, local market data show. That followed a 14.8% fall over Friday and Monday, which left the index at a six-year low. Even after the bounce, Reuters says the index is down about 40% this year, the worst-performing stock market in the world.</p>

<p>What changed? After an online meeting with MSCI on Monday, the Indonesia Stock Exchange said it will remove stocks with highly concentrated ownership from its benchmark index. Exchange president director Jeffrey Hendrik said those stocks make up roughly 18% of the index weight. The exchange also halved the daily down limit on share prices, from 15% to 7%. Several listed groups announced share buybacks, and the state investment agency Danantara said it is ready to raise its stakes in state-owned companies. The chief of the financial regulator, Friderica Widyasari Dewi, put it simply: "The important thing is to keep building confidence."</p>

<p>Underneath, the picture is less reassuring. Foreign investors were still net sellers on Tuesday, selling Rp2.19 trillion more shares than they bought, Katadata reports, and their net selling this year has passed Rp92 trillion. Goldman Sachs estimates that removal by MSCI could trigger $5.6 billion of passive outflows. The rupiah is hovering around 18,000 per dollar, close to its record low from June. Fitch Ratings, which moved Indonesia to a negative outlook in March, says the sell-off reinforces the risks it flagged then.</p>

<h2>Bank Indonesia's call</h2>

<p>Bank Indonesia's board decides today. The benchmark rate is 5.75%, where it has been since June. Reuters says the central bank is expected to hold, but Citi now expects a half-point hike to 6.25%, and Capital Economics expects a quarter point. Capital Economics' Jason Tuvey warned that not hiking "would run the risk of disappointing investors and fueling further downward pressure on the currency." Bank Permata's chief economist, Josua Pardede, says the central bank can reduce volatility, "but only credible market-governance reforms can address MSCI's fundamental concerns."</p>

<h2>Manila's record, and the verdict</h2>

<p>In Manila, Mynt, the operator of the mobile wallet GCash, raised 60.9 billion pesos, close to $1 billion, in the largest initial public offering the Philippines has ever seen, overtaking Monde Nissin's record from 2021. More than 20 cornerstone investors, including BlackRock and the International Finance Corporation, committed about $500 million. The stock exchange says more than 140,000 GCash users invested through the app, many of them for the first time. The shares touched 6.76 pesos, then closed flat at the offer price of 6.60 pesos. President Ferdinand Marcos Jr acknowledged that "attracting fresh capital remains a challenge," but said the deal "gives us reason for optimism." On the same day in Seoul, the AI firm Elice fell sharply in its market debut, Reuters reports.</p>

<p>In LSN's analysis, Jakarta and Manila are telling two different stories about trust. Manila's deal shows that global money still wants Southeast Asian growth when the ownership is clear and the business is real. Jakarta's problem is whether investors can trust who owns what, and no interest rate decision can fix that on its own.</p>

<p>What to watch: Bank Indonesia's decision this afternoon, then the Bangko Sentral ng Pilipinas and the Bank of Korea on Thursday, where polls point to a quarter-point hike in Manila and a hold in Seoul. And watch whether foreign selling in Jakarta finally slows.</p>

<p>Our verdict: Tuesday's bounce in Jakarta was a relief rally built on new rules, buybacks and tighter price limits. It was not yet a vote of confidence, because foreigners sold into it. Indonesia now has until MSCI's decision next June to prove its market is investable. Manila has just shown the reward for getting that right: patient global money, and ordinary savers buying in through their phones. Across Southeast Asia, the price of trust is now being set in public, and the question is whether Jakarta can rebuild it faster than investors walk away.</p>

<h2>Sources</h2>

<ul>

<li><a href="https://www.straitstimes.com/business/indonesia-bourse-further-tightens-stock-selling-restrictions" target="_blank" rel="noopener">Reuters via The Straits Times, 20 Oct 2026</a></li>

<li><a href="https://market.bisnis.com/read/20261020/7/2014177/ihsg-ditutup-melejit-565-ke-5278-saham-bbca-bbri-bmri-kompak-melesat" target="_blank" rel="noopener">Bisnis.com, 20 Oct 2026</a></li>

<li><a href="https://katadata.co.id/finansial/bursa/6ad74be52d0f7/ihsg-naik-5-65-saat-asing-net-sell-rp-2-19-t-goto-bumi-ramai-ditransaksikan" target="_blank" rel="noopener">Katadata, 20 Oct 2026</a></li>

<li><a href="https://en.antaranews.com/news/436749/ihsg-stock-index-rebounds-4-percent-on-buybacks-policy-steps-analyst" target="_blank" rel="noopener">ANTARA, 20 Oct 2026</a></li>

<li><a href="https://money.kompas.com/read/2026/10/20/121224026/ihsg-rebound-343-persen-buyback-rp-45-triliun-dan-reformasi-bei-jadi-katalis" target="_blank" rel="noopener">Kompas, 20 Oct 2026</a></li>

<li><a href="https://www.cnbc.com/2026/10/20/indonesia-msci-inflation-interest-rate-.html" target="_blank" rel="noopener">CNBC, 20 Oct 2026</a></li>

<li><a href="https://interaksyon.philstar.com/business/2026/10/20/320742/gcash-owner-mynt-edges-higher-in-record-philippine-ipo-amid-asian-selloff/" target="_blank" rel="noopener">Reuters via Interaksyon/Philstar, 20 Oct 2026</a></li>

<li><a href="https://www.pse.com.ph/mynt-inc-raises-p60-9-b-in-historic-stock-market-debut/" target="_blank" rel="noopener">Philippine Stock Exchange, 20 Oct 2026</a></li>

<li><a href="https://bworldonline.com/top-stories/2026/10/20/788198/mynt-makes-market-debut-after-record-philippine-ipo/" target="_blank" rel="noopener">BusinessWorld, 20 Oct 2026</a></li>

<li><a href="https://www.philstar.com/business/2026/10/21/2564590/historic-mynt-market-debut-lifts-psei-above-5800" target="_blank" rel="noopener">Philippine Star, 21 Oct 2026</a></li>

<li><a href="https://bworldonline.com/top-stories/2026/10/18/787571/poll-bsp-to-hike-rates-by-25-bps-anew-2/" target="_blank" rel="noopener">BusinessWorld, 18 Oct 2026</a></li>

<li><a href="https://www.channelnewsasia.com/business/south-korea-central-bank-hold-rates-october-22-hike-in-november-reuters-poll-6473951" target="_blank" rel="noopener">Reuters via CNA, Oct 2026</a></li>

</ul>