Indonesia Faces S&P Market Downgrade Review, IDX to Engage Index Provider
Indonesia Faces S&P Market Downgrade Review, IDX Responds
Jakarta. Indonesia Stock Exchange (IDX) said on Wednesday it will engage directly with S&P Dow Jones Indices to address concerns after the global index provider placed the country’s capital market on a watchlist for its 2027 market classification review.
The move raises the possibility that Indonesia could be reclassified from an emerging market to a frontier market, a change that could affect passive investment flows tracking global equity indices.
IDX President Director Jeffrey Hendrik said the bourse is reviewing S&P DJI’s announcement and will seek further discussions to better understand the issues underlying the evaluation.
“IDX will engage in constructive communication and discussions with S&P Dow Jones Indices to better understand the concerns raised and the various aspects being considered in the evaluation process,” Jeffrey told reporters on Wednesday.
Jeffrey said the exchange, together with the Financial Services Authority (OJK) and other market stakeholders, would continue implementing improvements to address the issues highlighted by the global index provider.
“Together with OJK and all stakeholders, IDX will continue pursuing various initiatives to address these concerns. The exchange remains committed to improving transparency in Indonesia’s capital market to ensure a fair, orderly, and efficient market,” he said.
S&P DJI announced on Tuesday evening that it had placed Indonesia and Turkey on a watchlist for a potential downgrade from emerging market to frontier market status, citing several issues, including market transparency.
The decision follows a similar move by MSCI, which placed Indonesia under market accessibility review in January 2026.
S&P DJI also added Nigeria to its watchlist for a possible upgrade from a standalone market to a frontier market in next year’s classification review.
Indonesia’s inclusion on the watchlists of both major global index providers has drawn close attention from investors because it could influence passive fund flows linked to global benchmarks.
The sentiment has also weighed on the domestic equity market. The Jakarta Composite Index has fallen more than 30% so far this year, or roughly 35% in US dollar terms.
Despite the review, IDX said it will continue strengthening market infrastructure and governance in coordination with regulators and industry participants to address the concerns raised by global index providers and preserve the competitiveness of Indonesia’s capital market among international investors.
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