GIC, Temasek deny claims they pressured MSCI to downgrade Indonesia's market
Indonesia's former trade minister Muhammad Lutfi this week alleged that Singapore state investors were involved in a ploy to drive stock prices down in Indonesia.
State investors GIC and Temasek said allegations that they pressured MSCI to downgrade Indonesia's market were untrue. (Photos: CNA/Jeremy Long)
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SINGAPORE: Singapore state investors GIC and Temasek on Wednesday (Oct 21) rejected allegations that they pressured global index provider MSCI to downgrade Indonesia's market status.
Both firms were responding to media queries regarding an Instagram post by Indonesia's former trade minister Muhammad Lutfi, who claimed Singapore state investors orchestrated a scheme to suppress stock prices in Indonesia.
"The allegations about GIC and our staff are untrue," a GIC spokesperson said in a statement.
GIC said its investment decisions are not driven by index classifications or top-down views of a market. Instead, it looks at the fundamentals at a company level or asset level.
"We have been invested in Indonesia for over 30 years across asset classes and will continue to invest where we find good, bottom-up, risk-adjusted opportunities," said GIC.
Separately, Mr Fock Wai Hoong, Temasek Global Investments' head of Asia Pacific (excluding China and India), said at a press conference on Wednesday that the allegations by the former Indonesian minister are baseless.
He was addressing a question about Mr Lutfi's comments at the launch of the 2026 e-Conomy SEA report by Google, Temasek, and Bain and Company.
"No one from Temasek, neither the institution nor the individuals working for the institution, have ever reached out to MSCI in order to influence any decisions they have ever made around any exchange across the region," he said, describing the claims as "patently untrue".
The statements follow claims published by Mr Lutfi in an Instagram post this week that GIC and Temasek sought to incite market panic and trigger a sharp sell-off in Indonesian equities to acquire shares at a discount.
He further alleged that the two firms pressured MSCI to threaten to downgrade Indonesia's market status to drive prices down.
MSCI classifies equity markets into four tiers: developed, emerging, frontier, and standalone. The index provider evaluates economies based on economic development, liquidity, market size, and accessibility, according to its website.
Last week, MSCI announced the launch of a consultation on a proposal to reclassify the MSCI Indonesia Indexes from emerging market to standalone market status over concerns including suspected coordinated trading practices.
Following the announcement, the Jakarta Composite Index plunged as much as 16 per cent before paring some losses to trade at around 5,300 points – down about 9 per cent from pre-announcement levels.
Indonesian President Prabowo Subianto struck a combative tone on Wednesday, saying the MSCI was trying to "intimidate" his country.
"I simply say to the MSCI: the Indonesian nation fears no one and will not be cowed," Mr Prabowo told a gathering of his Cabinet that was broadcast on the government's official YouTube channel.
"We possess strength, we have courage, we are willing to make sacrifices, and we refuse to surrender," he added.
MSCI told Reuters that its decisions follow transparent and rules-based methodologies.
On MSCI's website, the index provider said standalone markets are broadly classified into two groups: newly eligible markets and markets previously classified under developed, emerging or frontier markets categories.
"A reclassification to a standalone status may occur in the case of severe deterioration in market accessibility or size and liquidity," the website said.
Currently, the markets with standalone status include Argentina, Lebanon, Ukraine and Jamaica.
