IDX in Talks with S&P Over Potential Downgrade to Frontier Market Status

The Indonesia Stock Exchange (IDX) is communicating with global index provider S&P Dow Jones Indices regarding the potential downgrade of the Indonesian stock market’s status from emerging market to frontier market. IDX Director of Trading and Member Regulation Irvan Susandy stated that the exchange is in discussions with S&P, as it has been with MSCI and FTSE Russell. “As of this morning, we are still waiting for their response,” Irvan told reporters at the IDX in Jakarta on Wednesday, 8 July 2026. He noted that the exchange continues to implement capital market reforms, ranging from minimum free float requirements to disclosure of shares with high ownership concentration. Irvan explained that while all reform proposals have been executed, the authorities are continuously discussing concrete actions to convince the market that improvements are genuinely being made. However, he noted that some policies, such as the free float requirement targeted for completion by 2029, will only show results in one to three years. Regarding the potential downgrade, Irvan said the IDX will continue to make its best efforts to ensure Indonesia remains an emerging market. “We take the current concerns as a positive impetus to make improvements. We hope investors remain confident that this exchange will continue to be managed well,” he said. S&P DJI has placed Indonesia on a watchlist for its 2027 review. While Indonesia currently retains emerging market status, S&P DJI indicated it may apply special treatment to Indonesian securities, with a possible reclassification to frontier market. The index provider stated it continues to monitor developments in share ownership transparency and guidance issued by the IDX to address the issue. If circumstances deteriorate, S&P DJI may consider applying special treatment to Indonesian securities, and if the issues remain unresolved one year after such treatment is imposed, the market classification will be assessed at the next annual review.