Foreign investors have net sold Rp 94 trillion of Indonesian stocks since the start of 2026, according to Katadata. The selling has sparked debate over whether the country’s capital market can stand on domestic demand alone.
MSCI review adds pressure
MSCI said on 16 October 2026 that it is considering reclassifying Indonesia from an emerging market to a standalone market. The index provider cited transparency and shareholding structure. Concerns include ownership transparency, low free float, liquidity and market governance.
Nafan Aji Gusta, senior technical analyst at Mirae Asset Sekuritas Indonesia, said foreign outflows do not necessarily mean the market is unattractive. He said reforms are needed, including deeper markets, a higher free float, consistent law enforcement, ownership transparency and minority investor protection.
Domestic base in focus
Nafan said the goal should not be to eliminate reliance on foreign investors. He said it should be to build a capital market with a strong domestic investor base able to absorb foreign selling without excessive volatility.
He wrote that Indonesia would set its own rating on its exchange.
Related: Jakarta index falls 2.64% as Foreign investors sell Rp 912.37 billion · Foreign investors sell Rp744.43 billion as IHSG closes higher
Source: MSCI
