Indonesian Capital Market Deemed Competitive Amid MSCI Review
The Chairman of the Indonesian Securities Analysts Association (AEI), David Sutyanto, believes the latest MSCI review results represent an important momentum to strengthen the quality of Indonesia’s capital market to make it more competitive globally. David stressed that the review results are not a negative signal, but rather an opportunity for all stakeholders to enhance the market’s attractiveness in the eyes of international investors.
"These results are not a negative signal for the Indonesian capital market, but rather a momentum to strengthen quality so that the market is more competitive in the eyes of global investors," David said in an official statement in Jakarta on Friday.
According to David, the foundations of the Indonesian capital market remain solid based on several key MSCI assessment indicators. Aspects such as investor requirements, foreign ownership limits, freedom of capital flows, and the custodian and trading systems still received relatively positive assessments. This shows that in terms of infrastructure and accessibility, Indonesia remains on the main radar of global investors in the Asia Pacific region.
Nevertheless, David acknowledged that there were notes on the information flow aspect. However, he emphasised that this is not a structural weakness that is difficult to fix, but rather input for regulators, the stock exchange, and listed companies to improve the quality of information disclosure and equal data access for both domestic and foreign investors.
"A market that is attractive to global investors is not only determined by size and liquidity, but also by the ease of access to credible, timely information that meets international standards," he added.
In line with this, research from Samuel Sekuritas Indonesia stated that the downgrade in the Information Flow criteria is not strong enough to change Indonesia’s status as an Emerging Market. Key supporting factors include the obligation to disclose shareholders with a minimum 1% stake, the High Shareholder Concentration (HSC) framework, and the roadmap to increase free float to 15%.
Based on the MSCI report released on Friday morning, out of 18 criteria assessed, 10 received the highest rating of "++" (double plus), indicating conformity with global best practices. Six criteria were rated "+" (single plus), while the Information Flow and Foreign Exchange Market Liberalisation Level criteria received a "-" (negative) rating, becoming areas of focus for future improvement.