IDX: We have high expectations that Indonesia will remain an 'emerging market' in MSCI
The Indonesia Stock Exchange (IDX) has expressed optimism that Indonesia will remain within the ‘emerging market’ category of the MSCI index, following various capital market reforms.
MSCI is set to announce the results of its Annual Market Classification Review this June, which determines the market classification status of countries within the MSCI index, including Indonesia.
“Once again, based on the concrete steps we have taken, we have very high expectations that Indonesia will remain in the emerging market,” said the Acting President Director of IDX, Jeffrey Hendrik, at the IDX Jakarta on Thursday.
During the session, Jeffrey also clarified market rumours suggesting that MSCI might reclassify Indonesia into the frontier market category. He emphasised that such information is incorrect and urged investors to always base their decisions on accurate information.
“We once again urge investors to check and cross-check information circulating in the market before making decisions,” Jeffrey said.
Addressing market confidence concerns amidst a 3-4 per cent correction in the Jakarta Composite Index (IHSG), he asserted that capital market reforms aim to restore both domestic and global investor confidence.
“By increasing transparency, improving data granularity, and providing information regarding high shareholding concentration, all of these are our efforts to rebuild investor trust in our market,” he added.
He further emphasised that the fundamentals of the Indonesian capital market are currently in good condition. Based on the financial reports of all listed companies as of the end of 2025, Jeffrey noted that companies recorded profit growth of more than 21 per cent.
Furthermore, in the first quarter of 2026 compared to the same period the previous year, particularly for LQ45 stocks, net profit grew by nearly 30 per cent, specifically 29.9 per cent. In terms of profit distribution, 80 per cent of companies recorded net profits in Q1 2026, the highest level in five years. For comparison, in 2020, only 63 per cent of companies were profitable, while the 2021-2025 period ranged between 73-76 per cent.
“This demonstrates that the fundamentals of listed companies are currently in good condition and can serve as a foundation for investors in their decision-making,” he stated.
As background, the global index provider MSCI announced its index rebalancing results for Indonesian stocks on 13 May 2026. In the MSCI May 2026 Index Review, MSCI removed six Indonesian stocks from the MSCI Global Standard Index, namely PT Amman Mineral Internasional Tbk (AMMN), PT Barito Renewables Energy Tbk (BREN), PT Chandra Asri Pacific Tbk (TPIA), PT Dian Swastatika Sentosa Tbk (DSSA), PT Petrindo Jaya Kreasi Tbk (CUAN), and PT Sumber Alfaria Trijaya Tbk (AMRT).
In the MSCI Small Cap Index, MSCI included PT Sumber Alfaria Trijaya Tbk (AMRT). Conversely, MSCI removed several stocks from the MSCI Global Small Cap Index, including PT Aneka Tambang Tbk (ANTM), PT Astra Agro Lestari Tbk (AALI), PT Bank Aladin Syariah Tbk (BANK), PT Bumi Serpong Damai Tbk (BSDE), PT Dharma Satya Nusantara Tbk (DSNG), PT Industri Jamu dan Farmasi Sido Muncul Tbk (SIDO), PT Midi Utama Indonesia Tbk (MIDI), PT Mitra Keluarga Karyasehat Tbk (MIKA), PT MNC Digital Entertainment Tbk (MSIN), PT Pabrik Kertas Tjiwi Kimma Tbk (TKIM), PT Pacific Strategic Financial Tbk (APIC), PT Sawit Sumbermas Sarana Tbk (SSMS), and PT Triputra Agro Persada Tbk (TAPG).