Indonesian stocks dive 11% as MSCI weighs market reclassification

JUST IN: Indonesian stocks dive 11% as MSCI weighs reclassifying the market, citing concerns over 'ongoing opacity in shareholding structures' and coordinated trading behaviour.

Indonesian stocks just dove eleven percent in a single session. Eleven.

The trigger is MSCI, the index giant whose classifications decide where trillions in passive money can and can't go. It's weighing whether to reclassify Indonesia's market, and you can see the Jakarta exchange here, where the selling got ugly fast. MSCI's complaint is blunt, ongoing opacity in shareholding structures and coordinated trading behaviour. In plain English, they're saying they can't always tell who really owns what, or whether some of those price moves are organic.

Why does a committee's opinion vaporise a tenth of a market in a day? Because a downgrade means index funds are forced sellers, no debate, no discretion, the money just leaves. Investors didn't wait for the verdict, they front ran it.

The hardest fact tonight is this. MSCI hasn't actually decided anything yet, and Jakarta already lost eleven percent on the possibility alone.

This is Sara White, reporting for HIT.