(Bloomberg) -- Indonesia will remove stocks with concentrated ownership from its benchmark equities index, the latest effort to avert a possible downgrade of its market status by MSCI Inc.
Jeffrey Hendrik, chief executive of the Indonesia Stock Exchange, said after a meeting with MSCI representatives Monday that the move was aimed at creating a “more credible and integrity-driven price index.”
Stocks with high shareholder concentration currently account for about 18% of the Jakarta Composite Index’s total weighting, he said, adding that Hong Kong’s benchmark Hang Seng Index also excludes such stocks.
“So this is best practice,” he told reporters in Jakarta. “We hope it will be effective.”
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