Data Transparency Not Enough to Restore MSCI Trust, Says Analyst

Capital market analyst and Founder of Traderindo.com, Wahyu Laksono, stated that while the Indonesia Stock Exchange (IDX) and the Financial Services Authority (OJK) have made progress in data transparency, it is fundamentally insufficient to restore the full confidence of global index provider MSCI in the short term. He noted that although authorities have launched various reform measures, MSCI’s decision to maintain the freeze on adding new constituents and adjusting the Foreign Inclusion Factor (FIF) signals that the global market still requires proof of consistent execution, not just regulations on paper. Wahyu acknowledged that the IDX and OJK have been responsive to criticisms regarding ownership opacity and coordinated trading, citing concrete steps such as the disclosure of data for shareholders owning more than 1%, expanded reporting thresholds for public share ownership, and a new High Shareholding Concentration (HSC) monitoring framework to mitigate risks of price manipulation. However, he identified several critical gaps that keep MSCI cautious. The information flow indicator remains weak, and global institutional investors still struggle to independently confirm the true number of freely floating shares. Furthermore, MSCI has extended its monitoring period, with the next review not until November 2026, indicating that a proven track record of enforcement is required before the freeze on new Indonesian stock additions and FIF adjustments can be lifted. Wahyu warned that the current freeze is holding back potential passive foreign capital inflows that track MSCI indices, removing a key short-term catalyst for the market. He also cautioned that large-cap stocks with concentrated ownership or free-float transparency issues face increased volatility and valuation discounts ahead of MSCI review periods. On a positive note, he believes this external pressure is accelerating regulatory reform, which will ultimately create a healthier and more competitive investment climate. He advised investors to remain selective, focusing on stocks with strong fundamentals and independently verifiable public ownership structures.