The index had fallen as much as 8.01 percent intraday in the morning session before losses deepened.
Shrinking index weight
The number of constituents in the relevant MSCI Indonesia gauge fell to 9 companies from 18. Free float market capitalisation dropped 55 percent to $53.36 billion. Indonesia’s weight in the MSCI Emerging Markets Index now stands at just 0.43 percent.
Concentration within the remaining constituents is stark. The banking sector accounts for 71.7 percent of the MSCI Indonesia Index, with PT Bank Central Asia Tbk (BBCA) alone representing 31.4 percent. At PT Barito Renewables Energy Tbk (BREN), four controlling entities hold 97.31 percent of shares, leaving a free float of only 2.69 percent. MSCI has frozen a planned increase in Indonesia’s Foreign Inclusion Factor.
Regulators weigh response
The Financial Services Authority (OJK) and the Indonesia Stock Exchange (BEI) are considering raising the minimum public shareholding requirement to 15 percent from the current 7.5 percent, aiming to broaden free float across listed companies. OJK has already imposed administrative fines totalling 2.1 trillion rupiah, including 500 billion rupiah tied to IPO allocation violations and coordinated transactions.
Other major financial stocks named alongside BBCA in the market’s banking concentration include Bank Mandiri (BMRI), BRI (BBRI) and BNI (BBNI). The Indonesian Central Securities Depository (KSEI) was also named among the institutions bearing on the market’s structure.
MSCI’s consultation runs until 30 April 2027, with a final decision expected by 30 June 2027. The episode has renewed scrutiny of concentrated controlling shareholdings and nominee accounts, which have been linked to asymmetric risks for the broader index.
Related: Jakarta's IHSG plunges 11.57% on MSCI Standalone review · MSCI's early Indonesia review catches exchange off guard
Source: MSCI
