Indonesia Under Pressure: Transparency Concerns Threaten Emerging Market Status

Indonesia has been one of the most promising places in the Asian region in recent years, especially in the field of technology and digitalization. However, it now faces a significant threat that could impact its emerging market status: the lack of transparency in shareholder holdings and stock flow information.

The main concern is that the information on shareholder holdings and stock flow is not reliable in Indonesia, making it difficult for global investors to have a clear idea of who actually owns the shares of companies listed on the IDX.

This scenario is further complicated by the depreciation of the rupiah against the US dollar, which has led to a drop of more than 30% of the Jakarta Composite Index in terms of dollars this year,

Although Indonesian authorities have launched several reform plans to address the lack of transparency, it is unclear whether they will come in time to avoid a revaluation. Proposed measures include the implementation of stricter disclosure requirements for shareholders with holdings above 1% of the company's capital and an increase in the minimum float requirement to 15%. However, many questions remain about the effectiveness of these reforms and whether they will be enough to convince index providers not to revaluate the country.

Most worrisome is that a revaluation could have severe consequences for Indonesia's reputation as a destination for digital assets. The country has been working on developing its regulatory framework for digital assets at a time when the Asian region is becoming increasingly attractive to investors of this type. A revaluation could prompt investors to re-evaluate their exposure to the country as a whole, and not just the stock market.