20/10/2026

BIZ & FINANCE TUESDAY | OCT 20, 2026

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MISCI warning sparks ‘panic selling’ on Indonesia markets

VW plans to freeze salaries until 2030, works council says FRNKAFURT: Volkswagen plans to freeze salaries for its 660,000 staff worldwide until 2030, the group’s works council said yesterday, confirming an earlier report by Sueddeutsche Zeitung . The Global Works Council said it had received internal information about the executive board’s plans Volkswagen declined to comment on “speculation”. A spokesperson added that a new round of talks later this week would be the forum for any proposals on labour costs The works council called the manage ment’s approach “absurd” and said it expected strong resistance to what is described as the plan’s “rather unrealistic” implementation “At Volkswagen, pay development is decided at the negotiating table, not by decree from the executive boardroom,” a spokesperson for Germany’s trade union IG Metall said Relations between Volkswagen and its labour representatives have deteriorated in recent months, as CEO Oliver Blume pushes ahead with the most radical restructuring in the German auto group’s history The Sueddeutsche Zeitung reported the news earlier yesterday, citing internal documents The absence of pay rises could mean a loss of income of around 10% for those affected, due to inflation, the paper said The paper report said the new global management guidelines, effective from the fourth quarter, also include cuts to variable pay, special payments, benefits, and jobs. – Reuters Citi said that while it is likely the whole billing capacity for M3 is not impacted, the delay could put at risk around A$25 million in NEXTDC’s operating earnings for fiscal 2027. – Reuters NEXTDC halts share trading pending update on data centre power delay SYDNEY: Australia’s NEXTDC said yesterday its shares had been placed on a trading halt pending a market update it will provide on the impact of a delay in power supply to its M3 Melbourne data centre. The data centre operator said it expects to make an announcement within two days, adding that its board is yet to meet to assess the delay and its implications. Analysts at Citi said that the delay likely relates to electricity distributor Jemena pausing work on electricity lines meant to deliver power to M3. That would likely delay the billing from M3, which represents around 70 megawatts (MW) of the 155MW of incremental billing in the state of Victoria the brokerage assumed for fiscal year 2027, it added. NEXTDC said the trading halt would allow the company to meet its continuous disclosure obligations while it evaluates the impact of the power supply delay, including any potential effect on its fiscal 2027 financial guidance. In August, the company forecast underlying earnings before interest, tax, depreciation and amortisation for fiscal 2027 to be between A$385 million and A$410 million (RM1.09 billion to RM1.16 billion).

o Stocks down well over 40% in 2026, rupiah hovers near record low, government bonds sell off SINGAPORE/JAKARTA: Indonesian capital markets were battered yesterday, with stocks hit by a record two-day rout as an expulsion warning from MSCI scared off investors, heaping pressure on Jakarta to respond to the index provider’s long-standing concerns. Jakarta’s benchmark stocks fell over 5% yesterday to a six-year low after plunging 11.6% on Friday, as the world’s worst-performing share market reeled from MSCI saying it was considering shifting Indonesia to “standalone” status from its current “emerging markets” mantle. A shift to standalone status would risk cutting Southeast Asia’s biggest economy off from international capital, relegate it to an investment backwater and club it with a group of standalone markets that includes Lebanon and Zimbabwe. “The MSCI announcement was unexpected to us, causing a market panic,” Indonesia Stock Exchange’s chief executive Jeffrey Hendrik said, ahead of a meeting between the exchange leaders and MSCI executives later yesterday. Jitters over the threat flowed through to the rupiah and bond markets. The rupiah weakened to 18,048 per dollar, not far from the record low of 18,190 hit in June, while a slide in Indonesian government bonds pushed the 10 year yield to 7.4%, according to traders, from 7.169% on Friday. The more-severe-than-expected move by MSCI, which first flagged concern in January over ownership transparency, has intensified pressure on Indonesia’s regulators and finance officials as investors reevaluate their exposure to Indonesian assets more broadly. It has also raised the spectre of capital flight risk for a one-time emerging market favourite that has been grappling with eroding investor confidence over Indonesia’s fiscal health and central bank independence under President Prabowo Subianto. S&P Global Ratings sovereign analyst Rain Lin said MSCI’s latest warning was likely to result in additional capital outflows but did not anticipate them to be of a magnitude that would TOKYO/SYDNEY: A unit of Japan’s Daiichi Life has made an indicative proposal to buy more than 79% of shares in Australian investment manager Challenger it does not already own, Challenger said yesterday. Under the proposal, the Japanese insurer is offering A$11.80 apiece, valuing Challenger at A$7.94 billion (RM22.6 billion). The unit, TAL Daiichi Life Australia Pty, holds 20.36% of the Australian investment manager, according to LSEG. Daiichi Life, through its unit, had initially acquired a 15.1% minority stake in Challenger from MS&AD Insurance Group Holdings in April 2025. The takeover proposal is subject to a number of conditions including satisfactory completion of due diligence, Challenger said yesterday. “The Board of Challenger is considering the

A worker walks past an electronic board displaying stock movement at the Indonesia Stock Exchange in Jakarta on Oct 16. – REUTERSPIC

functioning,“ strategists at Goldman Sachs said in a note. Yesterday, the stock exchange halved its down limit to 7% to try to slow the selling. Indonesia’s financial regulator on Friday unveiled sanctions against those linked to alleged trading manipulation in shares of three firms, with the fines totalling 2.1 trillion rupiah (RM467.4 million). “The fines are a positive move, but there needs to be concerted action to stamp the authority of the OJK and take direct action against certain well-known players who have been involved in market abuse,“ said Angus Mackintosh, an Asean specialist at Aletheia Capital in Singapore. Goldman Sachs estimates a full MSCI removal could trigger US$5.6 billion (RM22,85 billion) of passive outflows. Active funds benchmarked to these indices hold more than US$8 billion, although any selling would be discretionary rather than benchmark-driven, they wrote. Foreign investors have net sold US$4.88 billion worth of Indonesian stocks so far this year, on track for the biggest annual outflow in at least 16 years. – Reuters offer of A$3.13 per share, adjusted for Cleanaway’s final dividend paid on October 8 Cleanaway said the A$3.13 offer values the company at about A$9.3 billion, including debt, and represents a 32.1% premium to its closing share price on August 12, the last trading day before EQT’s approach was disclosed Cleanaway said its board unanimously recommends shareholders vote in favour of the scheme implementation deed, in the absence of a superior proposal *The firm said it may pay aggregate cash dividends of up to A$0.19 per share before implementation, including a fully franked special dividend. Any dividends paid will be deducted from the scheme consideration In August, the Melbourne-based waste solutions provider had granted exclusive due diligence to EQT Infrastructure. – Reuters

materially increase financing costs. “More concerning is the potential damage to investor confidence and the risk that sentiment weakens more broadly across government bond markets and foreign direct investment.” MSCI’s warning on Friday marked the latest in a string of setbacks for Prabowo’s government this year, after Moody’s and Fitch cut their sovereign rating outlooks to negative. The market’s nosedive came ahead of a policy decision from Bank Indonesia this week. While the central bank is widely expected to stand pat, some analysts have raised the possibility of a rate hike to stem the selloff in the bond market. MSCI had threatened to downgrade the Jakarta market to “frontier” status in January but said on Friday a lack of progress in remedying its concerns about opacity in ownership and trading behaviour meant even a drop to that status would not reflect the severity of the issues. “The burden of proof has shifted: avoiding reclassification will require clear evidence that the announced reforms have been consistently implemented and materially improved market indicative offer,” the Australian firm added. In a separate statement, Daiichi Life confirmed that TAL Daiichi Life Australia has submitted a non-binding proposal to the board of directors of Challenger, adding that no decision has been made by the company on proceeding with the binding transaction. Separately, Cleanaway Waste Management said yesterday it had agreed to be bought by Swedish private equity group EQT in a deal valuing the Australian waste management company at about A$9.3 billion, including debt. Under the terms of the deal, Cleanaway shareholders will receive A$3.095 in cash for each share held, less the cash amount of any dividends paid before completion of the transaction The consideration reflects EQT’s indicative

Daiichi Life unit tables offer to take over Australian investment manager Challenger