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 (S&P DJI) regarding the potential downgrade of the Indonesian stock market status from an emerging market to a frontier market.
Irvan Susandy, Director of Trading and Member Regulation at IDX, stated that the institution will hold discussions with S&P, as the IDX is also continuously engaging with Morgan Stanley Capital International (MSCI) and FTSE Russell.
“So far, as of this morning, we are still awaiting their response; we have contacted them but are waiting for a reply from S&P,” Irvan told reporters at the Indonesia Stock Exchange in Jakarta on Wednesday, 8 July 2026.
He noted that the exchange continues to implement capital market reform measures, ranging from minimum free float regulations to the disclosure of shares with high ownership concentration.
Irvan explained that although all capital market reform proposals have been implemented, the exchange authorities continue to discuss concrete actions that can be taken to convince the market that improvements are genuinely being executed. However, he mentioned that some new policies may only show results after one to three years, such as the completion of the free float target which is slated for 2029.
Regarding the potential downgrade in status, Irvan stated that the IDX will continue to exert its best efforts to ensure Indonesia remains an emerging market. “We view the current concerns as a positive driver for us to implement improvements regarding those issues. Therefore, we hope investors remain confident that this exchange will continue to be managed well, and we are confident that the IDX can continue to grow larger than before,” he said.
In its announcement, S&P DJI placed Indonesia on a watchlist for review in 2027. Currently, Indonesia maintains its status as an emerging market. However, S&P DJI has opened the possibility of applying special treatment to Indonesian equities, with the potential for reclassification into a frontier market.
S&P DJI stated they are continuously monitoring developments in Indonesian share ownership transparency as well as the guidelines issued by the IDX to address these issues. “If conditions deteriorate, S&P DJI may consider applying special treatment for Indonesian securities,” they wrote in an announcement on Wednesday, 8 July 2022.
Based on S&P DJI’s country classification methodology, if the issues remain unresolved one year after the implementation of special treatment, the classification of the Indonesian market will be reassessed during the following annual review.