Danantara Boss's Response to Tomorrow's MSCI Announcement

Morgan Stanley Capital International (MSCI) will announce its latest index rebalancing for the Indonesian stock market on Tuesday (12/5/2026). Chief Investment Officer (CIO) of Danantara, Pandu Sjahrir, is not worried about tomorrow’s announcement, stating that the Indonesia Stock Exchange has already implemented the previously requested measures.

“Let’s just wait for tomorrow. Everything should have been incorporated by now; I’ve seen the developments, and the exchange is doing well in terms of the implementations underway. Insyaallah, it will be good tomorrow,” said Pandu at the Office of the Coordinating Ministry for Food, on Monday (11/5/2026).

According to him, the index decline today is not related to sentiments about the propriety of the exchange and domestic regulators regarding what MSCI has requested.

“You saw the changes today; I don’t think it’s about MSCI. Today is more about (sentiments regarding) the rupiah and various other things,” he said.

Previously, MSCI demanded improvements in transparency and capital market reforms at the Indonesia Stock Exchange, such as increasing the number of free-float shares, raising the minimum free-float limit to 15%, transparency in data on shareholders holding more than 1%, and others.

Nevertheless, this announcement is a major concern for market players because MSCI decisions often influence the direction of foreign funds entering or exiting the Indonesian exchange. Moreover, ongoing wars and global pressures have triggered foreign funds to leave Indonesia.

It is known that in many countries, the MSCI index is highly influential. When a stock enters the MSCI index, global investors must buy that stock to align their portfolios with the index composition. Conversely, if a stock or even a country is at risk of being removed from the index, the market can immediately be shaken by selling pressure from foreign investors.