MSCI has opened a consultation on reclassifying Indonesia’s stock market from emerging market to standalone market, moving far earlier than the announcement previously scheduled for November 2026. The Indonesia Stock Exchange, known as BEI, said the move caught it off guard.
Exchange says it was blindsided
Iding Pardi, Director of Development at BEI, said the timing was unexpected. “We are also frank that we are surprised. Many parties, including market players, are also shocked. This is almost a month earlier. Frankly, it was also outside our expectations,” he said.
The consultation was announced on Friday, 16 October, just days after BEI officials had met MSCI representatives in Bangkok on Tuesday, 13 October. MSCI’s consultation period on the proposed reclassification runs until 30 April 2027, with a final decision due no later than 30 June 2027.
Transparency concerns cited
MSCI, quoted via Reuters, said that it “considers Indonesia’s continued classification as an emerging market no longer appropriate” and is opening consultation on reclassifying the country as a standalone market. The firm had already warned in June that Indonesia could face reclassification if problems with market accessibility persisted.
MSCI has cited investor concerns over non-transparent ownership structures, concentrated share ownership, and suspected coordinated trading, which it says erode investability. It has frozen several changes tied to Indonesian index stocks pending further notice, including additions to the MSCI Indonesia Investable Market Index and increases in foreign inclusion factor and shares outstanding.
Pardi stressed that standalone market status is a separate category, not the lowest tier; MSCI’s three main classifications are developed, emerging and frontier markets. BEI said it will seek clarification from MSCI directly and work to strengthen market reforms in response.
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Source: MSCI
