MSCI Rule Shift May Spur $2 Billion Exit From Indonesian Stocks

Global funds may withdraw more than $2 billion from Indonesian equities in coming months if MSCI Inc. proceeds with a change to its indexing methodology, underscoring concerns about the investability of Southeast Asia’s biggest stock market.

The index compiler will decide by the end of January whether to tighten its definition of free float — the number of shares available for trading and a key determinant of a stock’s weighting – following industry feedback. Any approved changes would be effective in the index provider’s May review.