KONTAN.CO.ID - JAKARTA. Indonesia's stock exchange will include independent observers in a committee set up to determine a list of stocks with highly concentrated ownership structures, which are set to be excluded from Jakarta's main index, its chief said on Monday.

The exchange will also immediately launch an investigation when it has detected possible attempts to manipulate share prices, Jeffrey Hendrik told a press conference. It previously only issued warnings.

The remarks come after MSCI announced earlier this month that it could demote Indonesia's stock exchange to "standalone" market status, saying not enough had been done to arrest coordinated trading practices in its stock market

The exchange said last week that it would exclude stocks with high shareholding concentrations starting from November 2.

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Jeffrey said the independent committee overseeing the process would include academics and F. Chapman Taylor, who was with the Capital Group, as a representative of foreign investors

Indonesia will extend a policy that allows share buybacks without requiring approval from a general shareholders meeting until June 2027, the financial regulator's capital market supervisor, Hasan Fawzi, told the press conference

He said the stock exchange must refine its methodology when compiling its list of listed companies with high shareholding concentration

The Indonesian market had shown resilience following MSCI's recent announcement, Fawzi added

The MSCI downgrade warning prompted Indonesia's deepest two-day stock selloff on record

President Prabowo Subianto told his cabinet last week that MSCI was trying to "intimidate" Indonesia, but said the country would not be afraid, striking a combative tone in his first public reaction to the downgrade warning