Indonesia Stock Exchange CEO Resigns Following $80 Billion Market Rout
Market turmoil triggered by MSCI downgrade concerns, foreign outflows, and governance fears
Indonesia, Jan 30 : Iman Rachman, CEO of the Indonesia Stock Exchange (IDX), resigned on Friday following a dramatic $80 billion selloff sparked by concerns that MSCI could downgrade the country’s market to “frontier” status. The announcement came amid investor anxiety over transparency, share ownership, and governance standards.
The Jakarta Composite Index fell more than 8% over Wednesday and Thursday, marking its steepest two-day decline since April, before stabilising on Friday. The rupiah also weakened, last trading at 16,800 to the U.S. dollar, after hitting a record low of 16,985 last week.
Speaking on television, Rachman said he was taking responsibility for the crisis. “I hope this is the best decision for the capital market. May my resignation lead to improvements in our capital market,” he said.
Portfolio manager Mohit Mirpuri of SGMC Capital in Singapore described the resignation as necessary. “The bigger picture is a reset and an opportunity for the exchange to emerge stronger with clearer standards and governance,” he said.
Governance concerns and foreign outflows
The selloff followed an MSCI warning about share ownership transparency, which raised fears of a downgrade to frontier status if reforms were not implemented. Foreign investors sold roughly $645 million of shares over the two day period, compared with $1 billion in 2025.
Concerns over Indonesia’s fiscal management and governance under President Prabowo Subianto, including the appointment of his nephew to the central bank and the previous dismissal of finance minister Sri Mulyani Indrawati, have also shaken confidence.
In response, regulators announced improvement measures, including doubling the free float requirement to 15% and verifying shareholders with less than 5% ownership. Officials said communication with MSCI has been positive, and the proposed measures are expected to ease investor concerns once implemented.
Paul Dmitriev, senior analyst at Global X ETFs, noted, “Policymakers want to fix this. The government has every incentive to address these issues, as systemic outflows would materially impact the market.”
