MSCI said it is consulting on a proposal to reclassify Indonesia’s equity market from Emerging Market to Standalone Market. The index provider will also freeze certain index adjustments for Indonesian shares until further notice. Indonesia currently remains in the Emerging Market group.
Concerns over investability
MSCI cited concerns about the investability of Indonesian shares, including the transparency of shareholding structures and alleged coordinated trading. In its June 2026 market classification review, MSCI said several market participants had raised significant concerns. The firm said reforms announced by Indonesia’s capital market regulator had not yet shown adequate and consistent progress. Those reforms include disclosure of shareholdings above 1 percent and a roadmap to a 15 percent minimum free float.
Market participants viewed a downgrade to Frontier Market as insufficient, MSCI said. Institutional investors stressed the need for consistent implementation and sustained evidence of material impact.
What the freeze covers
Under the freeze, MSCI will not apply increases to Foreign Inclusion Factor or Number of Shares. It will not add new stocks to the MSCI Indonesia Investable Market Index. Stocks will also not move to higher market-capitalisation index segments. MSCI will continue removing stocks that Indonesian authorities identify under the High Shareholding Concentration framework.
Timetable for the decision
Market participants have until 30 April 2027 to submit responses to the proposal. MSCI will announce its final decision on or before 30 June 2027. It may provide periodic updates on feedback during the consultation period.
Related: MSCI proposes reclassifying Indonesia as Standalone market · MSCI's early Indonesia review catches exchange off guard
Source: MSCI
