Business · Singapore Bureau
MSCI to remove Indonesia's Barito Pacific from benchmark indexes
The index provider's decision to exclude the Indonesian conglomerate marks a setback for Jakarta's efforts to maintain its emerging-market classification. The move underscores concerns about corporate governance and regulatory compliance in Southeast Asia's largest economy.
LSN Singapore ·
MSCI has announced it will remove Barito Pacific from its suite of indexes, dealing a blow to Indonesia's broader capital markets standing at a sensitive time for the country's economic positioning.
The decision by the prominent index compiler reflects concerns about the Jakarta-listed conglomerate's corporate governance practices and operational transparency. Barito Pacific's exclusion comes as Indonesia faces pressure to strengthen investor confidence in its markets and regulatory framework.
For Indonesia, the removal represents a headwind in the country's broader efforts to preserve its emerging-market status and avoid a potential downgrade that could trigger capital outflows. Index exclusions can reduce institutional investor demand for affected securities and signal underlying weaknesses in market oversight.
The action underscores the challenges facing Southeast Asia's largest economy in maintaining confidence among foreign portfolio investors. Regulators and market participants will likely scrutinize governance standards across other major listed companies as authorities work to address the concerns raised by MSCI's decision.
Indonesia has been working to enhance its regulatory environment and corporate governance standards to compete for regional investment flows and protect its emerging-market classification.