IDX Responds to Threat of Indonesian Market Downgrade by S&P DJI

The Indonesia Stock Exchange (IDX) has spoken out after S&P Dow Jones Indices (S&P DJI) placed the Indonesian capital market on a watchlist for its 2027 classification evaluation, opening the possibility of a downgrade from emerging market to frontier market status. IDX President Director Jeffrey Hendrik said the exchange has taken note of the announcement and will immediately establish communication with S&P DJI to explore in depth the various aspects of concern in the evaluation process. “The IDX has observed S&P Dow Jones Indices’ announcement regarding the placement of the Indonesian capital market on a watchlist for the 2027 evaluation, which opens the possibility of reclassifying Indonesia’s status from emerging market to frontier market,” he said in a brief message to reporters on Wednesday (8/7/2026). Jeffrey stated that this communication aims to understand in detail the various concerns that form the basis of S&P DJI’s assessment. “The IDX will establish constructive communication and discussion with S&P Dow Jones Indices to delve into the concerns conveyed and understand the various aspects of focus in the evaluation process,” he said. Jeffrey added that the IDX will collaborate with the Financial Services Authority (OJK) and all stakeholders to strengthen capital market reforms, particularly in terms of transparency. “The exchange is committed to undertaking various efforts to enhance transparency in the Indonesian capital market to ensure a fair, orderly, and efficient market,” he said. Previously, S&P DJI included Indonesia on its watchlist for next year’s market classification evaluation. The decision follows MSCI’s move in January to place Indonesia under a review process due to market transparency issues. S&P DJI stated it is still monitoring Indonesia’s efforts to improve share ownership transparency, including reforms undertaken by the IDX to enhance information disclosure and market liquidity. The agency also warned that if the various issues of concern remain unresolved, Indonesia could be evaluated for a downgrade at the next annual review. These concerns have weighed on the domestic stock market. Year-to-date, the Indonesian stock index has fallen by more than 30 percent, or around 35 percent in US dollar terms, making it one of the worst-performing stock markets in the world this year.