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U.S. airline (AAL) (UAL) (DAL) fares for the holidays are surging, with Thanksgiving tickets up 31% and Christmas up 23%, as carriers pass on sharply higher fuel costs. MSCI may downgrade Indonesian equities (EIDO) from emerging market status, risking $5.6B in passive outflows and intensifying the Jakarta Composite Index's 43% YTD decline.
The iShares MSCI Indonesia ETF faces, in my opinion, significant risk from MSCI's potential downgrade of Indonesia to standalone market status, triggering capital flight and rupiah weakness. The ETF is heavily concentrated in Indonesian banks, which, despite attractive valuations (forward P/E 8.5x, ROE 18.5–22%), are highly sensitive to market shocks. Two scenarios emerge according to my calculations: a negative outcome could drive P/E to 7x and further rupiah depreciation, while a positive reversal could restore double-digit returns.
I am upgrading iShares MSCI Indonesia ETF to a "Buy" after a 15% crash driven by MSCI index exclusion fears. EIDO trades at a depressed valuation near 6x earnings and a PEG ratio close to 1x, with risk/reward skewed positively. Bank-heavy portfolio, high volatility, and recent dividend cut highlight risk, but technicals suggest a powerful rebound is possible.
Indonesian stocks tumbled after MSCI Inc. said the country no longer merits emerging-market status, risking an ejection from its global indexes and triggering fears of foreign capital flight. Bloomberg's Anthony Stephens breaks down the developments.
iShares MSCI Indonesia ETF (NYSEARCA:EIDO - Get Free Report) shares dropped 0.4% on Friday. The company traded as low as $11.96 and last traded at $12.00. 894,029 shares changed hands during trading, a decline of 21% from the average daily volume of 1,138,871 shares. The stock had previously closed at $12.05. iShares MSCI Indonesia ETF
Foreign investors continued pulling money from Asian equities in July, but the headline outflow masks a striking shift underneath: capital moved away from the region's biggest AI winners while selectively returning to markets with less dependence on the semiconductor boom. Investors sold a net $25.48 billion of shares across seven major Asian markets during the month, extending the region's foreign-selling streak to nine months.
I hold a neutral stance on the iShares MSCI Indonesia ETF, citing low valuation but persistent weak price action and a technical downtrend. EIDO trades at a bargain 8.7x P/E, but its 44% financials weighting and low 5.9% long-term EPS growth limit upside. Seasonality favors EIDO in July and August, yet resistance near $17 and heavy volume overhead constrain rally potential.
Indonesia plans to embed artificial intelligence in some key government programmes including its $15 billion free meals plan, according to a presidential regulation draft seen by Reuters, part of a strategy that the government believes could lift its gross domestic product by 12% by 2030.