MSCI weighs downgrading Indonesia to standalone-market status

Downgrading Indonesia to standalone- from emerging-market status, citing persistent concerns ​about the investability and governance of the country's equity market.

The ‌index provider launched a consultation on the proposed downgrade after issuing a warning in June that Indonesia could face reclassification if concerns about market accessibility persisted. MSCI said investors ​had raised concerns about opaque ownership structures, concentrated shareholdings and suspected ​coordinated trading, which it said undermined the market's investability.

Indonesian authorities ⁠have since announced reforms, including enhanced shareholder disclosure requirements and a ​roadmap for a minimum free-float requirement of 15 percent. However, MSCI said market ​participants had yet to see consistent evidence that the measures had materially improved market functioning.

"Accordingly, MSCI considers Indonesia’s continued classification as an Emerging Market no longer appropriate and ​is launching a consultation on a proposal to reclassify Indonesia as a ​Standalone Market," MSCI said.

The consultation will run until April 30, 2027, with a final ‌decision ⁠due by June 30.
 

MSCI said investor feedback suggested a move to frontier-market status would not adequately reflect Indonesia's market-accessibility issues. It expects to proceed with the proposed standalone classification unless there is clear evidence of material ​improvements in governance ​and market functioning.

MSCI ⁠will also maintain a freeze on certain index-related changes for Indonesian securities until further notice, including additions to ​the MSCI Indonesia Investable Market Index and increases in ​foreign inclusion ⁠factors or shares outstanding resulting from index reviews or corporate events.

Indonesia has faced a series of setbacks this year, with Moody's and Fitch cutting their sovereign rating ⁠outlooks ​to negative, citing reduced policymaking credibility.

 

The benchmark ​Jakarta stock index has fallen more than 30 percent this year, making it the worst-performing equity market ​in emerging Asia.

Source: The Jakarta Post

Prabowo Orders PLN Overhaul, Acceleration of 100 GW Solar Power Plan

President Prabowo Subianto has ordered an accelerated transformation of state electricity company PLN and faster implementation of Indonesia's ambitious plan to develop 100 gigawatts (GW) of solar power capacity, Danantara Indonesia Chief Executive Officer Rosan Roeslani said Wednesday.

Speaking after a meeting with the president at the State Palace in Jakarta, Rosan said Prabowo had instructed Danantara to review PLN's business model and submit recommendations for improving the company's efficiency, productivity and responsiveness.

"The main objective is to accelerate PLN's transformation so that it becomes better, faster and more responsive," Rosan said. "The president also wants to accelerate the development of 100 gigawatts of solar power capacity."

He said Danantara would work closely with PLN's management to conduct a comprehensive assessment and formulate proposals in line with the president's directives.

"We have been asked to carry out an assessment and then submit our recommendations to the president," Rosan said.

The instruction comes after a widespread power outage hit Batam Island over the weekend.

The planned transformation is expected to improve PLN's operational efficiency and productivity while reducing the government's subsidy burden, he added.

The directive also underscores the administration's intention to expand solar power generation as part of its broader efforts to develop Indonesia's electricity infrastructure.

However, Rosan did not provide a timetable for the 100 GW solar initiative or specify how the additional capacity would be financed and deployed.

Beyond the company's business model, Prabowo also called for a review of PLN's ability to respond to emergencies and unexpected disruptions to electricity supply.

Rosan said the assessment would include improvements to PLN's contingency plans to ensure the company could respond more effectively to potential power shortages and system failures.

He stressed the importance of reliable backup arrangements and preventive measures across Indonesia's electricity network.

Source: Jakarta Globe

Indonesia opens new LPG plant in West Java with 52,800-ton capacity

Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia inaugurated a new liquefied petroleum gas (LPG) plant in Cilamaya, Karawang District, West Java, on Thursday.

The facility has a production capacity of 160 tons per day, or 52,800 tons per year.

"Today, October 15, I invite everyone to join in prayer so that this inauguration proceeds smoothly," said Bahlil, who also serves as energy and mineral resources minister.

The plant’s output is expected to meet 10 to 15 percent of total LPG demand in West Java and Jakarta.

The facility processes 40 million standard cubic feet per day (MMSCFD) of natural gas. Its annual LPG output of 52,800 tons is equivalent to approximately 18.7 million 3-kilogram LPG canisters.

In addition to LPG, the plant produces 320 barrels of condensate per day, or 105,600 barrels annually.

The residual "lean gas" from processing is returned to state-owned energy company PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ).

The facility is owned and operated by private Indonesian company PT Energi Nusantara Perkasa (ENP).

Built over 13 months, the project represents an investment of US$36.93 million and employed around 200 workers during construction.

The Cilamaya plant uses mechanical refrigeration technology to cool gas, alongside turbo expanders for gas processing.

The project marks PT Energi Nusantara Perkasa’s second major facility since the company was founded in 2007.
 

It previously developed a gas processing facility with a capacity of 100 MMSCFD in Gresik, East Java, and has produced around 1 million tons of LPG over 19 years of operations.

Source: ANTARA News