Ahead of MSCI Rebalancing, IHSG Set for Volatile Trading

The Jakarta Composite Index (IHSG) is forecast to experience high volatility today, Friday, 29 May, driven by passive investment managers’ portfolio rebalancing ahead of the MSCI index’s effective implementation on 1 June.

Co-Founder of PasarDana and capital market practitioner, Hans Kwee, explained that the fluctuations are a technical response to MSCI’s announcement on 12 May 2026. He noted that although today is the adjustment deadline, most investment managers likely acted early.

“Given the stock movement patterns post-MSCI announcement, most fund managers probably adjusted their portfolios without waiting until the final deadline of 29 May 2026,” Hans said in a written statement received in Jakarta on Friday, 29 May.

Morning trading data shows the IHSG opened 17.42 points or 0.28% lower at 6,112.77. The LQ45 index of 45 blue-chip stocks also fell 10.51 points or 1.69% to 609.89.

Hans stressed that selling pressure on companies removed from the MSCI Global Standard Index or MSCI Small Cap Index does not reflect deteriorating corporate performance. The delistings are more due to technical factors such as weighting methodology and market liquidity.

“The delisting does not indicate changes or declines in fundamentals. Many removed companies actually have strong fundamentals, good prospects, and attractive valuations currently,” he added.

Hans noted that the post-rebalancing period may mark the bottom of IHSG declines, with this momentum presenting an opportunity for the index to recover, supported by OJK and SRO’s strengthened market transparency.

The stock market is highly dynamic. Investors are advised to conduct independent fundamental analysis before making investment decisions amid market volatility.

Market optimism is also driven by successful capital market reforms that have enhanced credibility and integration, maintaining confidence among local and foreign investors despite global technical pressures.