Indonesia Bourse Cuts Its Lower Auto-Rejection Limit to 7% From 15%

IHSG - JAKARTA. The Indonesia Stock Exchange said on Monday it has cut its lower auto-rejection limit to 7% from 15%, a move it said would support investors in making decisions.

The measure is effective Monday and will run until December 31 this year.

 

It comes after global index provider MSCI said on Friday it could downgrade Indonesia's stock market to "standalone" status, saying it was no longer worthy of emerging status, as "significant concerns remain around market dysfunction".

 

On Friday, Indonesia's benchmark index, the world's worst performer this year, closed down 11.57% in its biggest single-day drop in 28 years.

 

Read Also: Frail Indonesian Markets Reel After MSCI Shock Warning

 

"This adjustment is aimed at giving investors an opportunity to evaluate and digest available information, helping them make better investment decisions based on Indonesia's economic fundamentals," the exchange said in a statement.

 

Monday's move follows a weekend meeting between the financial regulator and capital market participants, including analysts and economists.

 

The policy will be reassessed periodically based on market conditions, the bourse said.

 

The measure is a way for trading of particular stocks to be rejected if the price drop reaches 7%.