BEI Chief's Response to MSCI's Plan to Exclude Highly Concentrated Indonesian Stocks

JAKARTA - PT Bursa Efek Indonesia (BEI) has responded to Morgan Stanley Capital International’s (MSCI) decision to continue restrictions on Indonesian stocks in its May 2026 index review. MSCI is also excluding stocks categorised as high shareholding concentration (HSC), or highly concentrated ownership. Acting BEI President Director Jeffrey Hendrik stated that BEI met with MSCI on 16 April 2026. During the meeting, BEI presented four strategic proposals to improve the quality and competitiveness of the capital market. “We appreciate the four proposals we submitted, which have been acknowledged by MSCI. We will continue to communicate with the index provider,” Jeffrey said on Tuesday (21/4/2026). In its latest announcement, MSCI decided to extend the rebalancing of the Indonesian stock index in May 2026. The institution is still assessing the impact of capital market reforms on investment access. “MSCI will exclude stocks identified by Indonesian authorities under the High Shareholding Concentration (HSC) framework,” MSCI stated. MSCI will also use data on shareholders holding more than 1 per cent to adjust free float calculations. The new data source will not be implemented until the capital market reform review is complete. “This approach is taken to limit index turnover and investability risks, while providing time for further evaluation of the newly announced reforms,” MSCI continued. The reported reforms include transparency of shareholders above 1 per cent, deepening investor classification, introduction of the HSC framework, and plans to raise the minimum free float limit to 15 per cent. Despite these reform steps, MSCI remains cautious. The rebalancing of Indonesian stocks is still postponed. Several restrictions continue to apply. MSCI has frozen increases in the Foreign Inclusion Factor (FIF) and the number of stocks. Additions of new stocks to the MSCI Investable Market Indexes (IMI) have not been made. Upgrades of stocks to larger segments are also held back, including from Small Cap to Standard.