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Hey everyone, this is my base case for Indonesian equities going forward. Personally, I view this as a market to avoid entirely, with zero exposure. For those who are already invested, I would seriously consider planning an exit ahead of the developments I believe are increasingly likely. As always, do your own work (DYOR). Based on recent disclosures and signals from Indonesia's capital market authorities, I struggle to see a path where MSCI continues to tolerate the current market structure indefinitely. The probability that Indonesia is eventually downgraded from Emerging Market (EM) to Frontier Market (FM) status appears materially underappreciated. If and when that happens, the mechanical consequences would be substantial, with an estimated US$30-35bn of forced equity outflows. As markets are forward looking, and rational participants will not wait for the formal announcement before repricing this risk. The adjustment process typically begins well in advance. At the same time, valuations remain elevated relative to the underlying quality of liquidity. The index looks inflated, and in my view, highly vulnerable to a sharp correction. The critical question is simple: who becomes the marginal buyer in a market where liquidity is increasingly artificial and both foreign and domestic institutional capital are incentivized to sell? Retail participation may provide some flow, but in size, it is negligible relative to the potential supply that could hit the market. This is the classic setup for a severe liquidity crunch. Once confidence in price discovery breaks, selling feeds on itself, bids disappear, and prices gap lower rather than adjust smoothly. In that scenario, exits become disorderly, correlations go to one, and the outcome is rarely contained or elegant. If this plays out, I believe the endgame will be very ugly with has very serious repercussions at many levels beyond equities. On micro level, let's look at Indonesia's biggest market cap company: Barito Renewables ($BREN) - US$66.4bn market cap, US$11mn daily turnover. On paper, this clears IDX and MSCI headline thresholds. But despite the size, observed daily trading value over the past six months has been extremely thin relative to market cap (just at 0.017% per day). If we measure liquidity against effective float instead of headline market cap: 0.22% per day, still very thin for the company size. This resembles micro-cap liquidity rather than mega-cap behavior. Compared this figure to other large EM mega-caps (Tencent, Samsung, major Chinese, Singaporean or Indonesian banks).