Coordinating Economic Affairs Minister Airlangga Hartarto believes\nthe risk of Indonesia\u2019s stock market being downgraded by MSCI can still\nbe mitigated. Global investors do not rely solely on MSCI indices as\ninvestment benchmarks, but also use others, such as S&P and FTSE\nRussell.<\/p>\n
Airlangga stressed that MSCI\u2019s assessment cannot be the sole\ndeterminant of investment decisions in Indonesia\u2019s stock market. Each\nindex provider has its own assessment of a country\u2019s capital market.<\/p>\n
\u201cMSCI is not the only rating. There are many others, such as S&P\nand FTSE Russell. One cannot dictate to the others,\u201d Airlangga said when\nmet at the Coordinating Ministry for Economic Affairs office in Central\nJakarta, as quoted on Sunday (25 October 2026).<\/p>\n
MSCI has previously opened a consultation on the possibility of\ndowngrading Indonesia\u2019s stock market from Emerging Market to Standalone\nMarket status. The proposal is not yet a final decision. The government\nand capital market authorities still have an opportunity to make\nimprovements by June 2027.<\/p>\n
Airlangga acknowledged that an MSCI downgrade could affect foreign\ninvestors\u2019 interest in Indonesian shares. However, he said the impact\ncould be contained because investors from the United States, Europe and\nAsia also use other indices as investment benchmarks.<\/p>\n
\u201cThe risk can certainly be mitigated. If, for example, MSCI does not\nrecommend our shares for purchase by investors from America, Europe or\nAsia, there are S&P and others that may recommend them,\u201d he\nsaid.<\/p>\n
Airlangga also said the fundamentals of companies listed on the\nIndonesia Stock Exchange (IDX) remained fairly strong, as reflected in\ntheir profit and loss performance and dividend payments to\nshareholders.<\/p>\n
He said one area that still needed improvement was compliance with\nthe requirement for a minimum proportion of shares to be held by the\npublic, known as free float.<\/p>\n
\u201cIf we look at the fundamentals of issuers or companies listed on the\nstock market, their profit and loss performance is good, and their\ndividend payouts are also good. What remains is implementing the 15%\nfree-float requirement, as some companies have yet to meet it,\u201d\nAirlangga said.<\/p>\n
The government and the Financial Services Authority (OJK) are pushing\nto raise the minimum free-float threshold to 15% to improve capital\nmarket governance. The policy forms part of efforts to reform\nIndonesia\u2019s stock market amid MSCI\u2019s review.<\/p>\n
Alongside increasing free float, the reforms include plans to\ndemutualise the exchange, changing the ownership and management\nstructure of the IDX. The government will update the public on the\nreforms ahead of the MSCI consultation deadline in June 2027.<\/p>\n
\u201cWe have until June next year. One element of the roadmap is to\npromote the demutualisation of the exchange. These steps and their\nprogress need to be communicated to the public,\u201d Airlangga said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/airlangga-msci-cannot-dictate-to-global-investors-1792936229", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }