IDX strives to keep Indonesian capital market in emerging market classification

PT Bursa Efek Indonesia (IDX) has confirmed it is making every effort to ensure the Indonesian capital market retains its emerging market classification by global index providers. Through their announcements, index providers MSCI and S&P Dow Jones Indices have placed the Indonesian capital market on a watchlist, opening the possibility of reclassification from emerging market to frontier market status. “We will do our best to ensure Indonesia, or the Indonesia Stock Exchange, remains in the emerging market category, with various things we can do,” said IDX Director of Trading and Member Regulation Irvan Susandy at the IDX Building in Jakarta on Wednesday. Irvan believes the Indonesian capital market will continue to grow, both in terms of average daily transaction value and market capitalisation. “Because our daily transaction value has reached US$2 billion, Rp34 trillion per day, we have been there. And I am confident that our potential exists,” Irvan said. He confirmed that capital market authorities are making improvements on issues highlighted by the global index providers, including transparency. “We are taking the various current concerns as something positive, that we will make improvements on these matters or concerns,” Irvan stated. He expressed hope that investors remain confident the Indonesian capital market will be managed well and sustainably going forward. “So, we hope that investors remain confident that this Exchange will continue to be managed well. And we believe the Indonesia Stock Exchange will be able to grow even larger than before,” Irvan said. In its announcement on Wednesday morning, S&P Dow Jones Indices placed Indonesia on a watchlist, opening the possibility of reclassification from emerging market to frontier market. Previously, in an announcement on Wednesday morning, MSCI stated it acknowledged Indonesia’s capital market reforms but would continue to monitor the consistency of policy implementation. If sufficient progress is not observed by the MSCI Index Review in November 2026, MSCI will consider various options for the appropriate treatment of the Indonesian capital market, potentially including a consultation on reclassifying Indonesia from emerging market to frontier market. The review by both global index providers highlights the same issue, namely concerns regarding transparency in the Indonesian capital market.