Danantara

Indonesia’s Market Hits 1998 Lows as MSCI Downgrade Threat Triggers $5B State Fund Response

Indonesia’s benchmark stock index fell over 11% to its lowest level since 1998 after MSCI proposed reclassifying the country from an emerging market to standalone status. This move threatens to remove Indonesian assets from major global indexes, potentially triggering billions in passive fund outflows. In response, the state-backed Danantara fund pledged $5 billion to support domestic companies, while Goldman Sachs warned of further declines due to weak earnings and macroeconomic headwinds.