Good morning! Yesterday’s news that Libya’s House of Representatives has finally ratified the Turkey-Libya maritime memorandum is obviously bad news for Athens, although, ultimately, it was largely expected. Equally obvious is that Greece was not prepared to play by the same rules as Turkey, which has no qualms about using methods Athens would rather avoid. And when it comes to money, the Turks are always difficult to compete with. More generally, Turkish President Recep Tayyip Erdogan is a formidable player in the geostrategic arena.

Indeed, it took a minor parliamentary coup to replace the former Speaker of the House of Representatives, Aguila Saleh, who had been unwilling to accommodate Turkish interests. Not that Libya is particularly renowned for its parliamentary traditions.

The news naturally triggered an immediate response. A meeting was convened at the Foreign Ministry to challenge the decision on legal grounds, while the Prime Minister’s Office remained in constant contact with officials to ensure a coherent statement setting out Greece’s national position.

It is not that Greece failed to make an effort. For example, Saddam Haftar, son of Libyan military commander Khalifa Haftar, visited Greece in June. It is simply that Turkey evidently has more attractive and immediate incentives to offer.

The decision will clearly be no more welcome in Egypt than it is in Greece. And it is equally obvious that relations with Libya are heading into troubled waters, particularly considering developments on the migration front, with boats now heading not towards Gavdos but towards Ierapetra, on Crete.

Opinion polls

The usual monthly round of opinion polls began yesterday, painting a broadly stable picture across the political spectrum.

The governing New Democracy party has improved slightly, for no particularly obvious reason. Former prime minister Alexis Tsipras has a smaller but still clear lead over PASOK leader Nikos Androulakis, while a party being methodically built around jailed former Golden Dawn figure Ilias Kasidiaris, primarily through social media but not exclusively, appears on course to enter parliament.

As we have said before, Prime Minister Kyriakos Mitsotakis clearly feels comfortable heading into the final stretch with these polling figures. He is, of course, carefully preparing his election campaign. But those who know him can see that, at this stage, he is — or at least appears — more relaxed, perhaps even more philosophical.

“If I am to govern for a third term, I will do so on my own terms,” he tells those around him.

I imagine he means that the political circumstances must allow him to maintain the standards of respectable governance, rather than presiding over some unwieldy political coalition that could tarnish both his record after eight years in office and the historical legacy every prime minister hopes to leave behind.

Ultimately, it is about how citizens will remember him.

Calm and a ‘pan-European understanding’

Meanwhile, Mitsotakis has thrown himself into dealing with the outstanding issues facing his administration and anything that could affect the elections, either resolving them or at least keeping them under control.

That includes relationships with political enemies, allies and those wavering between their emotions, common sense and personal interests.

Sources even speak of a certain “pan-European understanding” during election periods involving what has become a difficult adversary for European governments in recent years: Europe’s judges.

And with elections scheduled in nine EU countries in 2027, nobody is particularly keen on unnecessary complications.

The approach is to keep tensions low on every front and carry on like that until the end. Anyone in the driving seat, particularly with a lead of around 15 percentage points, would probably do exactly the same as Mitsotakis.

Androulakis has his say

Yesterday, I listened to PASOK leader Nikos Androulakis being interviewed on Mega Radio. Naturally, he was asked whether his recent statement that the leader of the party finishing first would become prime minister also applied to Mitsotakis.

His rather awkward “answer” was that he had been talking about PASOK.

As though there had ever been any question that, if PASOK won the election, someone other than Androulakis would become prime minister.

In any event, as government spokesman Pavlos Marinakis suggested during his briefing, perhaps Androulakis should set himself an electoral threshold, just as Mitsotakis has done with his 25% benchmark, to determine whether he stays or goes.

But what benchmark could the man realistically set? If PASOK gets 14% and Tsipras 13%, is everything fine? The reverse scenario is hardly worth discussing.

There is, however, a spirit of counterattack in the camp of my dear Alexis.

“Just give it a little time,” they told me.

“I’ve been giving it time for years,” I replied.

“You’ll see what happens to PASOK. A month from now, we’ll have candidate lists ready everywhere, and we’ll achieve the same numbers across the rest of Greece as we are getting in Athens — namely 17%.”

Public order minister visits the Prime Minister’s Office

Turning to another major issue of the day, the government is closely monitoring the demonstrations planned in Athens, Thessaloniki and dozens of other cities.

I hear that Minister of Citizen Protection Michalis Chrysochoidis visited the Prime Minister’s Office yesterday for a wide-ranging meeting with Mitsotakis.

Naturally, they discussed police preparations and intelligence concerning the possibility of unrest.

From what I understand, officials at the ministry’s headquarters on Katechaki Avenue are less worried about the student demonstrations themselves than about the possibility of troublemakers infiltrating the protesters and attempting to provoke disturbances that could derail the demonstrations.

Preparations are therefore being made with precisely that possibility in mind.

Mitsotakis heads to Vrilissia

Mitsotakis, meanwhile, is continuing to take every opportunity to meet and address members of the public.

On Friday afternoon, he will visit the main square in Vrilissia, a northern Athens suburb, where he will speak to residents.

More broadly, New Democracy is already operating in election-readiness mode.

Beyond the proposals that Deputy Prime Minister Kostis Hatzidakis has requested from MPs and ministers for the party’s programme, a meeting was held yesterday at New Democracy headquarters with party secretary Konstantinos Kyranakis and others.

The discussions focused on mobilising local party organisations and developing a dedicated digital platform accessible to all active party members.

Members will be able to submit proposals until 15 December for New Democracy’s governing programme for the next four years.

Greece’s Patriot deployment in Saudi Arabia set for long-term extension

An interesting development emerged from yesterday’s briefing by Defence Minister Nikos Dendias to military correspondents on the armed forces’ new structure.

With Saudi Arabia having settled its financial obligations relating to the Patriot air defence systems, Greece is preparing to extend the deployment of its military contingent near Saudi Aramco’s refineries for a considerably longer period.

In other words, the arrangement is moving away from month-by-month extensions.

This was evidently among the matters discussed during Dendias’ recent visit to Riyadh. Mitsotakis is also due to travel there in a few days for the EU-Gulf summit.

After all, at a time when the Saudis are reaching agreements with Turkey and Pakistan, Greece cannot afford to abandon them.

IASO-Piraeus Bank deal

A rumour circulated yesterday that the deal involving private healthcare group IASO and the investment consortium associated with Piraeus Bank, including Strix, had fallen through.

That is not true, an impeccable source assured me.

The deal is done and is currently before the Competition Commission.

IRIS: Person-to-person money transfers are falling

How can the significant decline in person-to-person transactions through Greece’s IRIS instant payment system be explained?

Somewhere between tax-related conspiracy theories, anecdotes and examples bearing little resemblance to reality, transfers between individuals have started falling because some people have spread fears about the Independent Authority for Public Revenue (AADE).

The concern is that pocket money might somehow be classified as taxable income, or that buying someone a drink could become a tax matter.

The resulting speculation has created considerable confusion.

But one crucial detail has been lost amid the noise: IRIS P2P transactions between private individuals are not transmitted to AADE as part of electronic expenditure reporting, because they do not constitute payments for goods or services.

Since IRIS was launched, transfers between individuals have totalled almost €18 billion, with most of that amount transferred over the past six years.

Not a single euro of those transactions has been classified as income and taxed.

As for the description accompanying a money transfer, this is optional and serves solely to help the sender and recipient identify the transaction.

The situation is, of course, different when a transaction involves professional activity, such as payments to a self-employed professional or a company, where the relevant reporting obligations apply.

In other words, there is a world of difference between pocket money from grandmother and payment for professional services.

The battle begins in Cyprus: Viva versus Bank of Cyprus

Since we have started with IRIS, let us continue in the same vein, with a new dispute erupting between Viva and Bank of Cyprus over the payment system’s introduction to the Cypriot market.

Following a tender last August, Viva was awarded a contract to provide electronic transaction processing services for the Cypriot government.

It subsequently began implementing the project, proposing DIAS’s IRIS e-commerce solution as the transaction processing infrastructure, given that Cyprus’s main banks already participate in DIAS for SEPA instant credit transfers.

Four leading Cypriot banks — NBG Cyprus, Eurobank Cyprus, Alpha Bank Cyprus and Ancoria Bank — have confirmed their participation in the IRIS solution proposed by Viva.com.

Bank of Cyprus, however, remains the only major institution that has yet to commit.

Viva accuses the bank of causing delays that undermine the initiative.

The company has also set out its criticisms of Bank of Cyprus in a letter to the Cypriot government.

Some sources go further, claiming that the four-year delay in awarding the project to Viva.com was linked to objections raised by the previous provider, JCC Payment Systems, in which Bank of Cyprus holds a 70% stake.

Abu Dhabi’s Crown Prince is coming to Athens

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan arrives in Athens tomorrow, accompanied by a substantial business delegation of around 60 people, following an invitation from Kyriakos Mitsotakis.

According to information received, a Greece-UAE business forum will take place on Thursday at Conrad The Ilissian, bringing together representatives of companies from both countries.

The visit’s programme also includes the signing of bilateral intergovernmental memoranda of cooperation.

And we are certainly not talking about investors who have only just discovered Greece.

UAE renewable energy company Masdar has already acquired TERNA Energy in a transaction with an enterprise value of €3.2 billion.

DAMAC has partnered with Public Power Corporation (PPC) to develop a data centre in Spata, near Athens, with an initial budget of €150 million.

Mubadala also has a history of investments in Greece, including in fish farming.

There is also the €4 billion investment cooperation agreement with Abu Dhabi holding company ADQ.

The visit therefore builds on an economic relationship that has already developed considerable depth.

The presence of so many business executives offers another opportunity for meetings and the exploration of potential partnerships.

How investors viewed Fourlis’ Investor Day: Plenty of optimism and a good CEO

The column has gathered market reactions to Fourlis Group’s Investor Day.

The company’s business plan for 2026–2029 envisages higher sales, stronger operating profitability and a gradual reduction in debt.

Its main growth drivers are the development of its existing retail network, the opening of new stores and digital transformation.

Overall, the strategy appears to be moving in the right direction.

However, the market considers it highly optimistic.

Sales are projected to grow at an average annual rate of 6.5%–7.5%, compared with expected market growth of less than 3%.

Existing operations are forecast to expand by 4.5%–5% annually, generating an additional €85 million–€95 million in sales by 2029.

Average annual sales growth is estimated at 2%–2.5% for IKEA and 2.5%–3% for the sporting goods division.

The chief executive made a favourable impression.

Investors were persuaded that he has rolled up his sleeves and is getting down to work. His previous experience at Greek electronics retailer Kotsovolos also convinced the market that he knows the business.

Papoutsanis targets double-digit growth

Let us turn to another three-year business plan, this time from listed personal care and soap manufacturer Papoutsanis, which its management is presenting today.

According to information received, the company’s factory at Ritsona is currently operating at just 45%–50% of its actual capacity, based on orders received last year.

That means Papoutsanis could double production without building another manufacturing facility, simply by increasing shifts and securing additional orders.

When fixed costs have already been covered, each additional order contributes almost directly to margins.

The company’s nine-month figures confirm management’s commitment to achieving double-digit growth this year.

The third quarter grew considerably faster and proved significantly stronger than the first, when growth had been just 5.2%.

Its medium-term target of €100 million in revenue by 2028, announced at the Hellenic Fund and Asset Management Association in June 2025, now looks likely to be achieved much sooner.

Revenue for the first nine months of this year has already exceeded €63.7 million.

The composition of revenue is particularly interesting.

Contract manufacturing for third parties accounts for 44%, soap bases for 14%, hotel products for 13% and branded products for just 29%.

In other words, 58% of turnover comes from industrial production on behalf of other businesses.

At a time when manufacturing facilities are closing across Europe and multinationals are looking for companies to produce their soap, Papoutsanis has a significant opportunity.

One more interesting detail: on 18 September, Papoutsanis CEO Menelaos Tasopoulos announced that his shareholding had exceeded 5%, reaching 6.53%.

A competitive advantage for Jumbo

From 1 November 2026, an additional €2 handling fee is expected to apply to small e-commerce imports from non-EU countries.

Together with the €3 customs duty introduced in July, this will bring the total charge to €5 per item.

Arrivals of small parcels into the EU fell by 60% in July, while their average declared value stands at €8.82.

The development could benefit Greek discount retailer Jumbo by reducing the price advantage enjoyed by low-value direct shipments from platforms such as Temu and Shein.

This is especially relevant for products that overlap with Jumbo’s range.

The potential benefit would come from some consumer demand shifting towards established retailers, although the impact on sales cannot yet be quantified.

The 15% cap causing headaches for loan servicers

The public consultation on the Economy and Finance Ministry’s draft legislation governing loan servicers ends tomorrow.

The aim is for the bill to be passed during the first week of November.

The 16 proposed measures — eight designed to protect borrowers and eight addressing transparency and oversight of loan servicers — concern a loan portfolio worth approximately €80 billion currently under management.

Of that amount, €41.5 billion relates to non-performing household loans, €28.15 billion to business loans and around €10 billion to loans owed by self-employed professionals.

The total increased by €59 million in one quarter, entirely because of business lending.

Mortgage balances, meanwhile, fell by €172 million.

The most striking provision in the draft bill is a 15% cap on the upfront payment required for a bilateral debt restructuring agreement.

Until now, servicers have generally demanded at least 30%, and frequently as much as 50%.

The cap could be reduced further on social or health grounds.

Another important change concerns the timetable.

Creditors would have three months to respond with either a sustainable restructuring proposal or a reasoned rejection. Borrowers would then have one month to respond, keeping the overall process below six months.

Failure to meet the deadline would automatically suspend interest accrual and trigger notification of the Bank of Greece.

A detailed statement of outstanding debt would have to be supplied free of charge within 45 days. Otherwise, interest would again be frozen.

Breaching an active restructuring agreement — through termination, a payment order or foreclosure proceedings — would result in a fine of €50,000–€500,000, a credit equivalent to five instalments in favour of the borrower and a five-month extension without additional charges.

Loan servicers would also be required to submit annual strategic management plans to the Bank of Greece and disclose financial information.

Fees and expenses relating to securitisations under the Hercules asset protection scheme would be subject to special scrutiny.

The market is now awaiting the final form of the legislation with considerable interest, following the dozens of proposals and comments submitted during the public consultation.

Capital reduction at Ioannou and Azora’s Donkey Hotels

At an extraordinary general meeting held on 13 October, Donkey Hotels, owned by the Ioannou family and Spanish investment group Azora, approved a €42,026,208.90 reduction in its share capital.

The reduction was implemented by lowering the nominal value of each share from €10.38 to €6.48.

As a result, the company’s share capital now stands at €69,828,162.48, divided into 10,775,951 registered ordinary shares with a nominal value of €6.48 each.

It is worth recalling that in July 2025, before the deal with Azora was announced, Donkey Hotels increased its share capital by €24 million through a cash contribution and the issue of 2,312,139 new ordinary registered shares with a nominal value of €10.38 each.

The latest general meeting also approved an amendment to the company’s articles of association concerning the composition and powers of its board of directors.

Previously, the relevant provision stated that the board could appoint one or more chief executives or executive directors exclusively from among its own members, while determining their responsibilities.

Under the revised provision, the board may delegate the company’s management and representation powers to one or more individuals, whether or not they are board members, while specifying their responsibilities.

Those individuals may, in turn, delegate all or part of their assigned powers to other board members or third parties.

Furthermore, the board may appoint one or more chief executives or executive directors who may either be board members or external individuals, again defining their specific responsibilities.

Put simply, the amendment considerably expands the range of people who can participate in the company’s management.

Azora’s acquisition of 50.1% of Donkey Hotels was announced in late July 2025, with the Ioannou family retaining 49.9% and Christos Ioannou remaining chairman.

The transaction included the Athenaeum InterContinental, NEW, Semiramis and Periscope hotels in Athens, as well as NOUS in Santorini.

Plans include a comprehensive upgrade of the InterContinental and potential acquisitions of additional hotel properties.

From poultry to property

Angelakis SA is a familiar name in the Greek food industry and one of the country’s leading poultry producers.

Founded back in 1962, the company has been delivering impressive financial results.

Turnover stood at €14.43 million in 2017 but reached €55.5 million last year, with revenue for the current year expected to exceed €70 million.

That does not mean the business intends to confine itself to chickens.

Yesterday, I noticed the establishment of a company called Kifisia Place, naturally based in the northern Athens suburb of Kifisia.

Its purpose is to provide short-term rentals of furnished rooms and apartments.

The new company’s initial share capital has been set at €200,000, entirely subscribed by Angelakis Industrial and Poultry SA.

Management will be undertaken by Angelakis chief executive Athanasios (Thanos) Angelakis.

I should also add that, last year, the company’s management announced a €30 million investment programme that is now under way.

It includes a new, larger production facility, a tripling of manufacturing capacity and an ambitious rebranding initiative.

Judging by the company’s performance, that rebranding appears to be working.

The futures curve that does not believe in peace

At 11:21 GMT yesterday, the Dutch TTF natural gas benchmark exceeded €90 per megawatt-hour, reaching €90.10, up €2.06 on the day, for the first time since December 2022.

The TTF, or Title Transfer Facility, is the Netherlands’ virtual natural gas trading hub.

It is not exactly an exchange, but rather the delivery point on which contracts are traded, providing the benchmark gas price for the whole of Europe, expressed in euros per MWh.

Since the beginning of the year, the increase has exceeded 210%.

Qatar is exporting at just 20%–30% of its capacity, while Europe and Asia are competing for the same cargoes.

European gas storage facilities are 74% full, compared with 83% at this point last year and a historical average of 86%.

The EU’s storage target has already been reduced from 90% to 80%.

Oil is telling the same story, albeit in different terms.

We already know about spot Brent crude trading at $110 a barrel.

What is new is the December 2027 futures contract, which has climbed from $84.75 in mid-October to almost $90.

The conclusion is that markets are convinced supply chains will remain under severe pressure for a considerable time.

A market expecting a resolution would keep spot prices high while pricing longer-dated contracts much lower.

But when December 2027 prices also rise, the message is that the disruption in the Strait of Hormuz is no longer being treated as a temporary crisis but as the new normal.

Diesel prices reinforce this assessment.

European gasoil futures for December 2027 exceeded $1,000 per tonne for the first time, while the following month’s contract closed at $1,455 on 16 October.

Refining margins for middle distillates have meanwhile exceeded $100 per barrel.

The International Energy Agency (IEA) anticipates a seasonal crude oil surplus in early 2027, but expects diesel supplies to remain tight throughout the year.

The futures curve is not listening to politicians’ promises.

This is where airlines, shipping companies, refineries and electricity producers commit real money to securing their future supplies.

For Greece, when TTF gas prices soar to €90, the impact feeds directly into wholesale electricity prices and, ultimately, household bills.

Meanwhile, Greek refineries, benefiting from access to crude oil sourced outside the Persian Gulf and record diesel refining margins, are enjoying their best year.

The 2,600-point fortress: What is keeping the Athens stock market afloat?

The Athens Stock Exchange has shown remarkable resilience whenever its General Index approaches the 2,600-point threshold, despite repeated attempts by sellers to push it lower.

After reaching a 17-year high of 2,738 points during the final trading session of September, the market has been hovering around this psychologically important level while searching for direction.

During October, the General Index has closed below 2,600 points on five occasions.

The threshold has also been breached during trading in each of the last nine sessions.

Yet in most cases, buyers have stepped in, sometimes led by banking stocks and sometimes supported by selected blue-chip companies recovering ground after their recent underperformance.

Yesterday’s session provided a typical example.

The General Index rebounded from an intraday low of 2,578 points to close at 2,610.

Maintaining this level remains a critical factor in determining the market’s short-term direction.

An impressive comeback by banking stocks

There was a dramatic turnaround in banking shares yesterday, as the sector managed to transform substantial intraday losses into respectable gains.

The banking index, which had fallen by as much as 1.75%, finished the session 0.87% higher, closing at its daily high of 3,033 points after having dropped to 2,955.

The recovery confirms renewed buying interest around the psychologically important 3,000-point threshold, which continues to serve as a key reference level for the sector.

Among individual stocks, Piraeus Bank stood out with gains of almost 2%, closing at €9.89 despite having fallen towards €9.50 earlier in the session.

Alpha Bank recovered to €4.332 after trading below €4.20.

National Bank of Greece closed at €16.285, having earlier slipped below €16.

Eurobank ended the session at €4.46, recovering from around €4.30.

Ferry operators face a fuel crisis — and the government will have to decide who pays

I hear that concern within Greece’s ferry industry has moved well beyond the usual discussions about fuel prices.

The figures leave little room for optimism.

When the industry’s annual fuel bill threatens to double from €400 million to €800 million in 2026, against total sector revenue of approximately €1 billion, it becomes clear that a few timetable reductions will not solve the problem.

The situation is becoming increasingly difficult to control.

Ferry operators have made it clear that the issue cannot be handled by the Ministry of Maritime Affairs and Insular Policy alone.

A coordinated government response will be needed, because the ultimate financial decisions rest with the Prime Minister’s Office.

And this is where the difficult questions begin.

Who will absorb the additional €400 million, and how?

The ferry companies, whose profit margins are being eroded? Passengers, through more expensive tickets? Or the state, through interventions that would require additional fiscal resources?

Within ferry industry circles, the discussion is already moving a step further.

What happens if the crisis continues into 2027?

How many routes will remain commercially viable, and who will finance the renewal of the fleet?

Ferries do not simply transport tourists. They provide essential connections between Greece’s islands and the mainland.

And unless a solution is found in time, the biggest problem will not be the next increase in ticket prices.

It will be the decisions about which routes to cut — decisions that nobody will want to announce.

The hidden US-China game of Stratego in Greece’s ports

On the geopolitical chessboard of the Eastern Mediterranean, ports are beginning to acquire greater strategic importance than some military bases.

Anyone following Washington’s and Beijing’s moves closely can see that an intriguing contest for influence is unfolding in Greece, involving considerable diplomacy, enormous sums of money and intense behind-the-scenes activity.

China has established a strong presence in Piraeus through COSCO.

The Americans, meanwhile, are investing in the strategic importance of Alexandroupolis, the modernisation of Elefsina Shipyards and energy corridors towards the Balkans.

The $125 million financing provided by the US International Development Finance Corporation (DFC) for Elefsina is particularly interesting because it is officially linked to American strategic interests in counterbalancing China’s presence in Piraeus.

There is no need to search for classified documents to understand what is at stake.

The recent visit to Athens by US Secretary of State Marco Rubio, together with references to protecting critical infrastructure in the US-Greece Strategic Dialogue, adds another dimension.

The issue is no longer simply who controls the port terminals.

It is also about who has access to commercial networks, energy flows and the infrastructure supplying Europe’s interior.

And this is where things become particularly interesting for Greek shipping.

Greek shipowners do business with both China and the United States, knowing better than most that diplomatic alliances and commercial interests do not always coincide at sea.

The question, therefore, is not who will win the contest between Washington and Beijing.

It is whether Athens will manage to play with its own pieces — or end up serving merely as the chessboard.

Greek shipowners are buying their place in the next global economic order

Here is a question: What can Greek shipowners see that everyone else has yet to recognise?

I ask because, while the superpowers battle for control of maritime trade routes, Greece’s shipping community is witnessing billions of dollars in investment activity.

These moves range from Asian shipyards to stock exchanges and technology.

Dynagas and Dynacom, companies belonging to the G.P. group, are strengthening their relationship with China’s Hengli shipyards, where their combined orders have reached 69 vessels of various types.

The Tsakos Group is investing in new container ships.

Evangelos Pistiolis is proceeding with four medium-range tankers worth $198 million.

Aristides Pittas is expanding EuroDry’s fleet with a new Kamsarmax bulk carrier.

But the money is not flowing exclusively towards China.

DryDel’s Costas Delaportas is implementing a shipbuilding programme worth more than $1 billion in Japan.

South Korea also remains a major destination for Greek investment in technologically advanced vessels.

And the investment activity does not end at the shipyards.

Danaos chief executive John Coustas is considering using the Oslo stock exchange for the group’s dry bulk operations.

Meanwhile, Ioannis Martinos, through Signal Ocean, is acquiring Lgmar and the Telix platform, investing in maritime technology and data.

Greek shipowners are no longer simply buying ships.

They are buying positions in the next global economic order.

By spreading their investments across different countries, markets and business activities, they are reducing their dependence on any single centre of power.

And while Washington and Beijing increasingly demand clear geopolitical choices, a different logic appears to prevail on Akti Miaouli, the traditional centre of Greece’s shipping industry in Piraeus.

Alliances may be a matter of diplomacy, but diversifying business risk is a matter of survival.

MSCI delivers a devastating blow to Jakarta’s stock market

A single announcement by MSCI on 15 October wiped $82 billion off the Jakarta stock market in just two trading sessions.

On Friday, the benchmark index fell by as much as 11.6%, with trading halted after losses reached 8%.

On Monday, it dropped a further 3.6%.

Total losses approached 15%, marking the largest two-day fall in the index’s history.

The Jakarta Composite closed below 5,000 points, its lowest level in six years, and is now approximately 40% below where it began the year.

Statistically, it ranks last, making it the world’s worst-performing stock market in 2026.

The Indonesian rupiah plunged to 18,000 against the US dollar, approaching its record low recorded in June.

What makes the episode particularly interesting is that MSCI’s announcement did not propose downgrading Indonesia to Frontier Market status, as it had threatened in January.

Instead, it proposed moving the country directly into the Standalone category, effectively removing it from the main market classification indices.

MSCI’s reasoning referred to persistent opacity in shareholding structures, suspected coordinated trading and a lack of evidence that regulations were being effectively enforced.

The report argued that a Frontier Market classification would not adequately reflect the depth of the market’s problems.

The consultation will run until 30 April 2027, with the final decision expected by 30 June 2027.

Until then, any increase in the weighting of Indonesian equities will be frozen.

Indonesia’s government took 48 hours to respond.

Indonesian President Prabowo Subianto, a former defence minister and army general, convened a meeting on Monday with the chairman of the Financial Services Authority (OJK), the finance minister and the central bank governor to consider difficult decisions.

The daily limit on share price declines was reduced from 15% to 7%.

The stock exchange also removed companies with highly concentrated ownership structures from its general index, representing approximately 18% of its weighting.

Tuesday’s session closed 4% higher.

Credit rating agency Fitch, which had assigned a negative outlook in March, commented that the sell-off had heightened the risks.

MSCI, however, has demonstrated that even Emerging Market status can be taken away.

Not because a market is too small, but because of inadequate free float, opaque trading practices and failures to enforce basic market rules.