Indonesia bourse halves price down limit to slow record-breaking selloff

JAKARTA, Oct 19 (Reuters) - Indonesia's stock market operator halved the daily down limit on stock prices on Monday as authorities try to put the brakes on the market's heaviest-ever selloff, unleashed by MSCI looking to cut Indonesia from its suite of investable indexes.

• The Indonesia Stock Exchange lowered the down limit for stocks to 7% from 15%, effective from Monday until December 31

• The move matters because it slows selling in a market in freefall

• Selling was triggered when index provider MSCI said on Friday Indonesia was no longer worthy of "emerging market" status and proposed a downgrade to "standalone," which would exclude it from MSCI's global emerging and frontier indexes

• A two-day fall of 16% is the steepest such selloff for the Jakarta Composite benchmark .JKSE on LSEG records stretching back to 1990, and heavier than falls through the Asian financial crisis of 1998

• A down limit of 1 rupiah applies to stocks worth below 10 rupiah apiece

• Sell orders below limit-down prices are automatically rejected by the bourse's trading system

• The move was made "to ensure orderly, fair, and efficient securities trading, as well as to mitigate market volatility," the exchange said in a statement