Indonesia Remains an Emerging Market: MSCI  

Jakarta: MSCI has acknowledged the transparency reforms implemented by the Financial Services Authority (OJK), the Indonesia Stock Exchange (IDX), and the Indonesian Central Securities Depository (KSEI).
 
The reforms include improved disclosure of shareholders with ownership above one percent, more detailed investor classification, the implementation of the High Shareholder Concentration (HSC) framework, and a roadmap to increase the minimum free float requirement to 15 percent.
 
“While this recognition is a step in the right direction, what matters most for international institutional investors is the consistent implementation of these measures across the market,” MSCI wrote.
 
MSCI emphasized that it will continue to evaluate the scope, consistency, and effectiveness of Indonesia’s capital market reforms until its November 2026 Index Review.
 
“If sufficient progress is not observed by the November 2026 Index Review, MSCI will consider various appropriate options for the Indonesian market, including reclassifying Indonesia from an Emerging Market to a Frontier Market,” it explained.
 

Investor Concerns on Market Transparency 

In its review, MSCI noted that market participants had expressed concerns over Indonesia’s investability.
 
These concerns stem primarily from issues related to transparency, shareholding structures, and perceived coordinated trading patterns. They remain a key focus in global institutional investors’ assessment of the Indonesian market’s accessibility.

“The MSCI Market Classification Framework determines whether a market is developed, developing, or frontier based on accessibility and investability as experienced by international institutional investors,” said Raman Aylur Subramanian, Head of Market Classification and Taxonomies at MSCI.
 
In its 2026 Market Classification Review released on Wednesday morning, MSCI presented its evaluation of several global capital markets, updating classifications across Developed, Emerging, Frontier, and Standalone Markets.
 
MSCI did not alter Indonesia’s classification; the country remains an Emerging Market.
 
(Jonathan Sianto)