Indonesia's former trade minister accused Singapore's two major state-owned investment institutions of driving the Indonesian stock market down. Temasek Holdings and the Singapore Government Investment Corporation denied this. MSCI said last week that it plans to remove Indonesia from its global index unless there is a significant improvement in market governance. Impacted by this news, the Indonesian stock index recorded its biggest decline since the 1998 Asian financial crisis. Former Indonesian Trade Minister Mohammed Lutfi said on social media that Temasek and GIC have great influence on MSCI, and Singapore used these two institutions to put pressure on the index company. He posted a video on Instagram saying, “They put pressure on MSCI and threatened to downclassify Indonesia as an independent market, create large-scale panic, cause the stock index to collapse, and then buy high-quality Indonesian assets at a discount.” Wai Hoong Fock, head of Temasek Global Investments' Asia Pacific business outside of China and India, said in response to questions at a tech industry briefing in Singapore that Luteffi's accusations are unfounded and clearly untrue: “Temasek's organization and employees have never contacted MSCI and have not influenced any of its decisions.” A GIC spokesperson also denied the accusation and said that the sovereign fund has been in place in Indonesia for over 30 years. The fund said in a statement: “The claims against GIC and our employees are untrue. Our investment decisions are not based on index classification or top-down market judgment, but on the fundamentals of the underlying company and assets.” MSCI has yet to respond to requests for comment.

Indonesia's former trade minister accused Singapore's two major state-owned investment institutions of driving the Indonesian stock market down. Temasek Holdings and the Singapore Government Investment Corporation denied this. MSCI said last week that it plans to remove Indonesia from its global index unless there is a significant improvement in market governance. Impacted by this news, the Indonesian stock index recorded its biggest decline since the 1998 Asian financial crisis. Former Indonesian Trade Minister Mohammed Lutfi said on social media that Temasek and GIC have great influence on MSCI, and Singapore used these two institutions to put pressure on the index company. He posted a video on Instagram saying, “They put pressure on MSCI and threatened to downclassify Indonesia as an independent market, create large-scale panic, cause the stock index to collapse, and then buy high-quality Indonesian assets at a discount.” Wai Hoong Fock, head of Temasek Global Investments' Asia Pacific business outside of China and India, said in response to questions at a tech industry briefing in Singapore that Luteffi's accusations are unfounded and clearly untrue: “Temasek's organization and employees have never contacted MSCI and have not influenced any of its decisions.” A GIC spokesperson also denied the accusation and said that the sovereign fund has been in place in Indonesia for more than 30 years. The fund said in a statement: “The claims against GIC and our employees are untrue. Our investment decisions are not based on index classification or top-down market judgments, but on the fundamentals of the underlying company and assets.” MSCI has yet to respond to requests for comment.