Key facts
- OJK official Agus Firmansyah said MSCI still has concerns about market dysfunction despite announced reforms.
- MSCI is considering a consultation on classifying Indonesia as a standalone market, a category for severely deteriorated accessibility.
- MSCI will not add Indonesian companies to its indexes or increase their foreign inclusion factors and share counts.
- The IDX Composite Index fell 7.03% in the week ended Oct. 30, closing at 5,057.05.
- Foreign investors recorded net sales of Rp138.71 billion on Friday, with cumulative net selling for 2026 reaching Rp97.92 trillion.
MSCI is consulting on reclassifying Indonesia as a standalone market, the country's Financial Services Authority (OJK) said on Saturday, citing recurring market dysfunction and weak enforcement despite reforms announced by authorities. Agus Firmansyah, head of OJK's capital market, derivatives, and carbon exchange regulation and development department, said the global index provider remained concerned that problems previously seen in the Indonesian market could happen again.
MSCI has acknowledged several reforms introduced by Indonesian authorities, including disclosure of shareholders with stakes above 1%, an expansion of investor classifications from nine to 39 categories, reporting requirements for highly concentrated share ownership, and a gradual increase in the minimum free float requirement to 15%. However, the measures have yet to ease concerns over market transparency and enforcement. MSCI has said feedback from market participants indicates that a downgrade to frontier-market status would not adequately reflect the severity of the problems.
The proposed reclassification remains under consultation until April 30, 2027, with a final decision expected by June 30. In the meantime, MSCI's restrictions on Indonesian securities remain in place. The index provider will not add Indonesian companies to its indexes or increase their foreign inclusion factors and share counts. It will also continue removing securities identified by Indonesian authorities under the high shareholding concentration framework and use shareholder disclosure data to adjust free-float estimates.
The IDX Composite Index fell 7.03% in the week ended Oct. 30, closing at 5,057.05, down from 5,439.26 a week earlier. Market capitalization fell 7.52% to Rp8,862 trillion. The decline has brought the JCI's losses since the start of the year to about 41.52%, the worst performer among major indexes. Foreign investors recorded net sales of Rp138.71 billion on Friday. Their cumulative net selling for 2026 reached Rp97.92 trillion.