IHSG Forecast to Rebound as MSCI Rebalancing Pressure Eases in Early June

JAKARTA — The Jakarta Composite Index (IHSG) is projected to rebound as the pressure from Morgan Stanley Capital International (MSCI) index rebalancing eases in early June 2026.

Capital market practitioner Hans Kwee noted that global investors’ portfolio adjustments are more influenced by technical factors rather than changes in issuer fundamentals.

He said Indonesian stock market volatility may rise on Friday, 29 May 2026, as passive fund managers carry out portfolio rebalancing ahead of the MSCI index changes taking effect on 1 June 2026.

According to him, most institutional investors likely adjusted their portfolios following MSCI’s announcement on 12 May 2026, meaning selling pressure in the market is relatively controlled.

‘On Friday, 29 May 2026, the Indonesian stock market may face high volatility as passive fund managers rebalance portfolios in line with the MSCI announcement,’ Hans Kwee told Kompas.com on Thursday, 28 June 2026.

Hans pointed out that several companies removed from the MSCI index still have strong fundamentals, positive business prospects, and attractive valuations despite current market pressures.

‘The removal of certain companies from the MSCI index is more technical, related to weighting methodology and liquidity. It does not reflect changes or declines in company fundamentals,’ he said.

Additionally, Hans believes recent reforms by capital market authorities have strengthened investor confidence in the Indonesian stock market.

‘Post-MSCI rebalancing could mark the bottom of the IHSG decline, with potential to rebound based on company fundamentals in the future,’ he added.