The global index provider said last week it was considering reclassifying Indonesia as a “standalone” market from its current “emerging market” status, which would be a more-severe-than-expected downgrade and would remove Indonesian stocks from MSCI’s major global indexes.
The warning triggered a sharp selloff, with the benchmark Jakarta Composite Index plunging 11.6% on Friday and falling a further 3.6% on Monday. The index also touched a six-year low during the session. The combined two-day decline was the steepest on record, exceeding any losses seen during the 1998 Asian financial crisis, according to Reuters.
By Monday, cigarette mogul Robert Budi Hartono’s net worth had fallen to $12.4 billion from $15.5 billion before the selloff began last Friday, according to real-time data tracked by Forbes.
The fortunes of timber-to-energy tycoon Prajogo Pangestu and Singapore-born coal billionaire Low Tuck Kwong fell by $2.2 billion and $600 million, respectively.
The three billionaires have seen their wealth shrink sharply this year as Indonesian stocks have plunged nearly 40%, making the country’s equity market the worst-performing globally.
In comparison, Hartono’s net worth stood at around $21.4 billion at the end of 2025 while Prajogo had $39.5 billion and Low $22.3 billion.
Indonesia has been making efforts to avert the potential downgrade since MSCI first warned in January that it was reviewing the country’s market classification, citing concerns that shareholder disclosure rules could obscure the actual ownership of listed companies, weaken market transparency and raise the risk of improper trading activity.
Many Indonesian listed companies are tightly held by founders, families or large conglomerates, leaving relatively few shares available for public trading.
The market has been regaining some ground in recent months after regulators introduced several measures to address MSCI’s concerns.
However, the index provider has said that “significant concerns remain around market dysfunction, including continued suspected coordinated trading behavior and lack of evidence of meaningful enforcement.”
Shortly after last week’s warning, Indonesia’s financial regulator unveiled sanctions against those linked to alleged trading manipulation in shares of three firms, with the fines totaling 2.1 trillion rupiah. The three firms are listed entities linked to Prajogo and the billionaire Widjaya family’s Sinar Mas Group, The Business Times reported.
The Indonesia Stock Exchange also said on Monday that it will remove companies with highly concentrated ownership from the benchmark index. The index recovered some of its losses on Tuesday morning, as analysts viewed the measures as a positive step.
Bloomberg reported in September that the Hartono family has invested at least US$1.4 billion abroad amid market turmoil in Indonesia, though most of its assets remain at home.
|
Indonesia's top billionaires. From L: Robert Budi Hartono, Prajogo Pangestu, and Low Tuck Kwong. Photos courtesy of Barito Renewables Energy, SEAX Global and tokoindonesia via Wikipedia |
Prajogo has also made some overseas moves. The tycoon’s Barito Renewables Energy in July offered $5 billion to buy Energy Development Corp, the largest Philippine geothermal company, while Chandra Asri Pacific in August agreed to buy Jardine Cycle & Carriage’s car dealership business in Malaysia and Singapore for $208 million, Forbes reported.
Meanwhile, Low and his daughter recently sold a 30.25% stake in his flagship coal miner Bayan Resources to another Indonesian tycoon’s firm.