Key facts
- MSCI has extended its review of Indonesia's emerging market status until November.
- The index provider may downgrade Indonesia to 'frontier' market status.
- Concerns cited include opaque shareholding structures and suspected coordinated trading.
- These issues impact the Information Flow and Market Infrastructure pillars of MSCI's Market Accessibility framework.
- Indonesian regulators have announced recent transparency reforms.
- Indonesian assets have faced difficulties since January when MSCI froze the country's stocks in its indexes.
Global index provider MSCI announced on Tuesday that it has extended its review of Indonesia's status as an emerging market economy. The firm indicated that it might consider reclassifying Indonesia to 'frontier' market status if progress on addressing concerns is insufficient by its November review.
MSCI cited persistent opacity in shareholding structures and suspected coordinated trading behavior as key issues raised by international institutional investors. These concerns directly impact the Information Flow and Market Infrastructure pillars of MSCI's Market Accessibility framework, leading market participants to express "profound investability concern."