00:00Indonesia's stock market plunged from near-record highs this week.
00:04The sell-off was at one point the worst since 1998
00:07and has now led to the stock exchange CEO resigning.
00:11A warning by MSCI about a possible downgrade in Indonesia's status
00:16as emerging markets sparked back-to-back trading halts
00:19and frantic client calls across dealing desks from Hong Kong to Singapore.
00:24At the heart of this turmoil is the low free float,
00:26or the amount of shares available for public trading,
00:30of Indonesian stocks.
00:31If MSCI deems there hasn't been enough progress by May,
00:35it could cut Indonesia's weighting in its indexes
00:37and even downgrade the nation from emerging market status.
00:42The EM status is part of a classification system
00:45used by global index providers like MSCI
00:48to rank national financial markets by size,
00:51accessibility for foreigners, and maturity.
00:53The classifications help global investors decide
00:56where to allocate trillions of dollars.
00:58A downgrade would put Indonesia in the same place as Pakistan,
01:03which lost its EM status in 2021,
01:06just four years after it was upgraded.
01:08The anxiety is palpable.
01:10Nearly 100 journalists packed the main lobby of the Indonesia Stock Exchange
01:16as officials gathered to address the sell-off on Thursday.
01:19So far, regulators have outlined reform measures.
01:23This includes doubling the minimum free float to 15% starting next month
01:29and active market participation by the Sovereign Wealth Fund, Danantara.
01:33Still, many investors are on edge for whether such efforts will be enough to meet MSCI's demands.
01:40With MSCI's review still months away and deeper structural issues unresolved,
01:45Indonesia's stock market remains vulnerable to fresh bouts of volatility.
01:50That's keeping global funds wary about rushing back in.
01:54Because of its
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