News about emerging markets

Indonesian stocks posted their steepest two-day sell-off on record after MSCI said it was considering moving the country from “emerging market” to “standalone” status. The Jakarta benchmark fell 11.6 per cent on Friday and 3.6 per cent on Monday, hitting a six-year low intraday. The rupiah weakened to 18,030 per dollar, near June's record low of 18,190, while the 10-year government bond yield rose to 7.4 per cent. The exchange cut its daily down limit to 7 per cent from 15 per cent and will exclude stocks with high ownership concentration from the Jakarta Composite Index. Foreign investors have net sold US$4.98 billion of Indonesian stocks this year, on track for the biggest annual outflow in at least 16 years.

Nigeria’s Finance Minister Taiwo Oyedele said in Bangkok that markets and the international community have largely written off opposition parties as unserious, and are pricing in a second term for President Bola Tinubu and continuity of reforms. He ruled out any return to fuel subsidies or multiple exchange rates, warning that reversing reforms would trigger capital flight and could push the naira to N3,000, N3,500 or N4,000 per dollar. Oyedele said private investment rose from about $300 million in 2023 to $6 billion in 2026, and net reserves climbed from barely $3 billion to over $45 billion. CBN Governor Olayemi Cardoso said policy consistency and transparency are essential to sustaining investor confidence. Meanwhile, the African Democratic Congress (ADC) has asked Tinubu to explain a $12.4 billion gap (about N16.5 trillion) in external accounts identified in the World Bank’s October 2026 Nigeria Development Update.

On 15 October 2026 MSCI opened a consultation on reclassifying Indonesia from Emerging Market to Standalone Market status, citing opaque shareholding structures and suspected coordinated trading. Indonesia's weight in the MSCI Emerging Markets Index fell to 0.43% on 30 September 2026 from 1.16% at the end of 2025, as the free-float-adjusted value of the MSCI Indonesia Index dropped about 55%, from US$119.1 billion to US$53.4 billion. Feedback is open until 30 April 2027, with a decision due by 30 June 2027, and the freeze on Indonesian index changes remains. MSCI said it could proceed unless the consultation shows clear evidence of better governance, noting that Indonesia's reforms, including a roadmap to a 15% minimum free float, have seen little enforcement. If the reclassification goes ahead, funds tracking emerging-market indexes could be forced to sell Indonesian shares regardless of company fundamentals.

At the IMF annual meeting in Bangkok, attended by policymakers from more than 100 countries, the mood was calm as the global economy has so far withstood six months of high oil prices and geopolitical shocks, including the war in Iran, with growth buoyed by AI investment. The IMF's World Economic Outlook warns this resilience has come at a cost: energy support measures have cost 0.5% of global GDP, and many governments will struggle to sustain them, so the IMF urges targeted, temporary support rather than across-the-board subsidies. Its main concern is unsustainable public finances in rich countries, where budget deficits this year are the highest since the depths of the Covid pandemic and debt is projected to rise from 108% of GDP last year to 115% in five years. Managing director Kristalina Georgieva urged governments to rebuild fiscal buffers before the next shock, as bond yields have risen to their highest levels in decades. The article also notes the UK's plan to balance its books was praised, though UK bond yields have not fallen accordingly.