GIC, Singapore’s sovereign wealth fund, and investment company Temasek rejected an allegation that they pressured MSCI over Indonesia’s index status, The Straits Times reported, as the provider reviews a change that could affect funds tracking its indexes.
In an Oct. 15 notice, MSCI proposed moving the MSCI Indonesia Indexes from emerging-market to standalone status. The change, outlined in earlier EconoTimes coverage of the consultation, would place those indexes outside its emerging- and frontier-market groups. Funds that follow MSCI’s emerging-market benchmarks could then reassess their Indonesian holdings. MSCI has made no final decision.
MSCI cited concerns raised by market participants about unclear share ownership and suspected coordinated trading. The provider had warned in January of a possible move from emerging- to frontier-market status; its current consultation considers standalone status instead.
Former Indonesian trade minister Muhammad Lutfi alleged on Oct. 20 that GIC and Temasek sought a downgrade that would drive down Indonesian share prices, allowing them to buy equities more cheaply, The Straits Times reported. The two investors rejected the allegation on Oct. 21.
GIC said the claim about the firm and its employees was false. It said it makes investment decisions based on individual companies and assets and has invested in Indonesia for more than 30 years.
Fock Wai Hoong, Temasek Global Investments’ head of Asia-Pacific excluding China and India, called the allegation “patently untrue.” He said neither Temasek nor its employees had contacted MSCI to influence its decisions, according to The Straits Times.
The Jakarta Composite Index lost more than 14% over Oct. 16-19 before rising 5% on Oct. 20, The Straits Times reported. Indonesia Stock Exchange president director Jeffrey Hendrik told reporters that he regarded global index providers as independent. MSCI told the newspaper that its methodology governs classification decisions; feedback from investors stays confidential while the consultation is open.
Comments on the proposal are due April 30, 2027. MSCI plans to announce its decision by June 30, 2027.
