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JAKARTA,
March 4 (Reuters) - Fitch downgraded Indonesia's sovereign credit rating outlook from stable to negative on Wednesday, the latest in a series of blows to investor sentiment in Southeast Asia's largest economy.
Following are some details of the setbacks suffered over the last two months by the $1.4 trillion economy, which is a G20 member and a global commodities powerhouse, as well as some of its responses:
* Global index provider MSCI in January froze any changes toits Indonesian stock listings over concerns about ownership andtrading transparency. It also warned that Indonesia could bedowngraded from "emerging market" to "frontier market" status ifit failed to resolve the issues. Around $120 billion in marketvalue was wiped out from Indonesia's stock exchange followingMSCI's announcement. * Also in January, Goldman Sachs lowered its view onIndonesian equities to "underweight" and estimated that foreigninvestment outflows could reach $7.8 billion if Indonesia weredowngraded by MSCI to frontier market status, though it deemedthe scenario unlikely. * In February, rating agency Moody's cut Indonesia's creditrating outlook to "negative" from "stable", citing reducedpredictability in policymaking. Like Fitch, it maintained itsrating at Baa2 but said the shift to a negative outlookreflected policy effectiveness risks and signs of weakeninggovernance. * Moody's also cut the outlook for several companies,including telecom firm Telkom Indonesia, instant noodle makerIndofood CBP Sukses Makmur, and heavy equipment and miningcompany United Tractors. * Index provider FTSE Russell said in early February that ithad postponed a review of Indonesia, flagging concerns similarto those raised by MSCI about how difficult it is to determinethe levels of free-floating, or freely tradable, stock. FTSEsaid it would provide another update before a global review isdue in May. * Following the MSCI announcement, a number of topIndonesian regulators resigned, including the chief of theIndonesia Stock Exchange (IDX), and Indonesian financialauthorities promised major reform plans. * In response to Moody's，the Indonesian government said itwould explain its policies in more detail to global ratingagencies, including the purpose of its new sovereign wealth fundDanantara Indonesia. Moody's had also pointed to uncertaintiesrelated to Danantara's financing, policy direction, andinvestment priorities.(Reporting by Stefanno Sulaiman; editing by Gibran Peshimam)
