S&P Dow Jones joins chorus of warnings on Indonesia downgrade

S&P Dow Jones Indices has put Indonesia and Turkey on watch for a possible downgrade from emerging to frontier market status, citing persistent concerns over shareholding transparency. The move echoes MSCI’s earlier warning on Indonesia and adds pressure to a market already hit by heavy foreign outflows, a 31% year-to-date decline in the Jakarta Composite, and a 1% drop on Wednesday. If unresolved, the issue could trigger special treatment for Indonesian securities and eventually a reclassification review in 2027. The article also highlights broader macro headwinds, including President Prabowo Subianto’s populist policies and rising state intervention, which have weakened the rupiah, now down 8% this year and near all-time lows. The development is negative for Indonesian equities and underscores elevated risk for investors in the country’s capital markets.