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Penulis
On May 12, MSCI delivered a verdict on Indonesia. Nineteen companies were removed from its global benchmark indices, six of them large caps, including Amman Mineral, Barito Renewables and Chandra Asri. The decision was made in New York, the United States. The Indonesia Stock Exchange (IDX) Composite (IHSG) opened 1.33 percent lower the next morning. Passive global funds began forced selling with no discretion to do otherwise. Expected outflows ran as high as US$2.2 billion. The IHSG has now fallen roughly 23 percent from its January peak.
The verdict was issued by a four-firm cartel. MSCI draws the maps. BlackRock, Vanguard and State Street manage the capital that follows them. Together these four New York firms exercise more authority over the world's capital markets than most governments.
MSCI is the world's largest equity-index provider. BlackRock is the world's largest Exchange-Traded Fund (ETF) issuer. By contract, BlackRock's iShares funds license MSCI indices and must track them. Roughly $1.5 trillion of BlackRock assets are benchmarked to MSCI indices, making BlackRock MSCI's largest client.
