IDX Chief Speaks Out on S&P Announcement
The Indonesia Stock Exchange (IDX) has responded to the announcement by global index provider S&P Dow Jones Indices (S&P DJI) regarding the placement of Indonesia on its 2027 watchlist.
In the Country Classification - 2026/2027 Watchlist released on 7 July 2026, S&P DJI placed Indonesia on the 2027 Watchlist. This means Indonesia is now under monitoring by the index provider for a possible change in classification during the upcoming 2027 annual review. Indonesia, which is currently classified as an Emerging Market, faces the potential reclassification to Special Measures/Frontier Market.
IDX President Director Jeffrey Hendrik stated that the exchange has closely examined the announcement by S&P Dow Jones Indices regarding the placement of the Indonesian capital market on the watchlist for the 2027 evaluation, which opens the possibility of reclassifying Indonesia’s status from Emerging Market to Frontier Market.
“The IDX will establish communication and constructive discussions with S&P Dow Jones Indices to delve into the concerns presented and to understand the various aspects being considered in the evaluation process,” Jeffrey told reporters on Wednesday.
Alongside the Financial Services Authority (OJK) and all relevant stakeholders, the IDX will continue to undertake various efforts to address existing concerns. The exchange is committed to enhancing transparency within the Indonesian capital market to ensure a fair, orderly, and efficient market.
In addition to Indonesia, S&P DJI has also included Turkey in its 2027 Watchlist under a similar scenario (Emerging towards Special Measures/Frontier), as well as Nigeria, which is being monitored for a potential upgrade from Standalone to Frontier.
The core issue prompting S&P DJI to place Indonesia under monitoring involves concerns regarding share ownership transparency and its impact on liquidity and the reliability of price formation in the market.
Global institutional investors frequently question the lack of openness regarding share ownership structures on the Indonesian exchange, alongside concerns regarding alleged coordinated trading patterns. These two factors make it difficult for foreign investors to accurately measure true free float and cast doubt on whether market prices truly reflect fair mechanisms.
On a positive note, S&P DJI noted that Indonesian authorities—ranging from the OJK to the IDX—have taken several regulatory steps to address these issues. However, S&P issued a firm note: if these problems remain unresolved, Indonesia faces the potential imposition of Special Measures or even reclassification to Frontier Market during the 2027 review.
Conversely, if market transparency and liquidity improve, positive sentiment is expected to flow, providing Indonesia with the opportunity to maintain its Emerging Market status.