Danantara Chief Speaks Out on MSCI's Continued Hold on Indonesia's Index Status
Jakarta, CNBC Indonesia - The Badan Pengelola Investasi Daya Anagata Nusantara (BPI Danantara) has provided its perspective after Morgan Stanley Capital International (MSCI) announced updates regarding the assessment of free float for Indonesian securities in its global indices effective 20 April 2026.
In the May 2026 index review, MSCI decided to retain the temporary policy that has been in place for Indonesian securities. MSCI noted the capital market transparency reforms announced by the Financial Services Authority (OJK), Indonesia Stock Exchange (IDX), and Central Securities Depository (KSEI).
Danantara’s Chief Investment Officer, Pandu Sjahrir, stated that Indonesia’s capital market is currently operating under market mechanisms that are adjusting to the reform policies.
“I believe the market mechanisms are functioning, and now MSCI will also observe the progress of the existing reforms,” he said when met at Graha Mandiri in Jakarta on Tuesday (21/4/2026).
Pandu explained that the capital market regulators are continuously coordinating to meet MSCI’s requirements.
“I think it’s positive in the note that from the exchange’s side, they have carried out stages in accordance with the feedback received from MSCI, and this represents progress,” he clarified.
“They also want to monitor going forward that the reforms will continue to be implemented. I think this is an initial positive initiation regarding MSCI,” he added.
As information, MSCI’s announcement follows its previous release on 27 January 2026, when it froze the rebalancing of the Indonesia index.
“MSCI notes the capital market transparency reforms announced by the Financial Services Authority, Indonesia Stock Exchange, and Central Securities Depository,” as quoted from the official announcement on the website, Tuesday (21/4/2026).
These reforms include increased disclosure for shareholders holding more than 1% and more detailed investor classifications.
Additionally, regulators have introduced a High Shareholding Concentration (HSC) framework and a roadmap to increase the minimum free float to 15%. MSCI is currently evaluating the scope, consistency, and effectiveness of these new policies in the context of determining free float and investment eligibility.
In the May 2026 index review, MSCI decided to maintain the temporary policy applicable to Indonesian securities. This policy includes freezing increases in Foreign Inclusion Factors (FIF) and Number of Shares (NOS), as well as not adding new shares to the MSCI Investable Market Indexes (IMI).
MSCI will also not conduct upgrades between market capitalisation segments, including from small cap to standard. On the other hand, shares identified under the HSC framework by Indonesian authorities will be removed from the indices in accordance with MSCI’s global policies.
Furthermore, MSCI may use 1% shareholder disclosure data to adjust free float estimates if necessary. However, other new data will not be incorporated into index calculations until the evaluation process is complete and input from market participants has been considered.
This step is taken to limit index turnover and investability risks while allowing time for the evaluation of the newly implemented reforms. MSCI emphasised that it will continue to coordinate with market participants and relevant authorities in Indonesia.
Looking ahead, MSCI is open to input from market participants regarding the effectiveness of the new policies. Further updates are expected to be provided in the Market Accessibility Review scheduled for June 2026.