Jakarta stocks plunge as MSCI considers dropping Indonesia from global indexes

Foreign capital is making a large-scale exit from the Indonesian stock market, and the bond market is now starting to feel the effects, says SEB strategist Eugenia Victorino.

Monday’s stock market plunge of more than 5 percent was the worst in almost 30 years in the country. The Indonesian rupiah has also fallen by more than 8 percent in a year, to almost 18,000 rupiah to the dollar.

Selling pressure is significant, especially in index-heavy stocks such as large banks, says Herditya Wicaksana, an analyst at brokerage PT MNC Sekuritas.