JAKARTA: The Chief Executive Officer of the Indonesia Stock Exchange, Iman Rachman, announced his resignation effective Friday, Reuters reported.
The decision was made following the sudden fall in the country’s stock market which saw more than US$80 billion (around RM370 billion) in market value disappear in two days.
“I hope this is the best decision for the capital market. Hopefully my resignation will lead to improvements in our capital market,” he said during a press conference here today.
The fall came after global index provider MSCI signaled the possibility of Indonesia being downgraded from developing market status to frontier market .
This follows concerns over the level of transparency, share ownership structure and market liquidity.
Although the Jakarta Composite Index traded flat today after authorities announced stabilization measures, the benchmark index had previously fallen more than eight percent on Wednesday and Thursday, recording its worst two-day decline since April.
Pressure was also felt on the rupiah currency, which traded around 16,800 against the US dollar, after hitting a record low last week, reflecting the increasingly significant outflow of foreign capital.
Iman Rachman, in his statement, said he took full responsibility for the situation and hoped that his resignation would help restore investor confidence and open up space for reform in the Indonesian capital market.
Analysts see the move as a form of reset, with the crisis providing an opportunity for exchanges and regulators to strengthen governance standards, including proposals to increase free float requirements to 15 percent and reassess share ownership structures.
However, investor sentiment remains fragile amid ongoing concerns over the government’s fiscal policy as well as political interference in financial institutions.
Data showed foreign investors had net sold shares worth US$645 million in two days, indicating major challenges still need to be addressed to restore market confidence.
-Agency
