Indonesian stocks have rallied from a five-year low in early June to bull market status, with the Jakarta Stock Exchange Composite Index posting a gain of more than 10% since that trough despite being down roughly 29% year-to-date. S&P Global’s reaffirmation of Indonesia’s BBB sovereign rating with a stable outlook helped shift market sentiment from pricing in deterioration to pricing in stabilization. MSCI also decided not to downgrade Indonesia from emerging market status, providing significant relief to investors and helping halt panic selling. The Indonesian regulator’s measures to impose a higher minimum free float and stricter ownership disclosure requirements addressed liquidity and concentration issues that had driven some investors away.
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