Latest MSCI Announcement Puts Investors on Alert, Spotlight on This Issue
Jakarta, CNBC Indonesia - Investors are currently adopting a cautious or wait-and-see stance in their investment decisions in the capital market. This is because the latest announcement from Morgan Stanley Capital International (MSCI) is not considered an ordinary update.
Analyst at Doo Financial Futures, Lukman Leong, stated that this MSCI announcement tends to have a negative short-term impact due to the absence of stock additions or weight increases, while key issues such as free float and transparency continue to be highlighted.
“As a result, foreign funds that typically enter during rebalancing are being held back, and some stocks may face selling pressure, leading to a weakening of the JCI index,” he said when contacted by CNBC Indonesia on Wednesday (22/4/2026).
According to him, there is a stark contrast in the attitudes of foreign and domestic investors. Foreign investors view it as a signal of caution regarding the quality and accessibility of the Indonesian market, rather than just a routine index change.
“The focus of foreigners is on liquidity, transparency, and governance, so they tend to hold back or adopt an underweight position until there is clarity on improvements,” he added.
In contrast, domestic investors, both institutional and retail, see this more as an opportunity and do not view it entirely negatively.
Nevertheless, he added that the weakening of the JCI, which is hovering around 7,500, is not as severe as before because it had been anticipated by market participants.
“The market has already priced it in, and there is no more serious downgrade in status. Additionally, domestic investors are playing a significant role in cushioning the pressure, so the impact is more limited,” he further noted.
Meanwhile, Analyst at MNC Sekuritas, Herditya, stated that this MSCI announcement is a continuation of MSCI’s previous requests to the Indonesian stock market, which are now beginning to be fulfilled by the capital market regulator.
According to him, there is now fulfilment of requirements and capital market reforms being carried out by the regulator, so investors are not overly panicked and are still monitoring further developments.
Nevertheless, he added that the High Shareholding Concentration (HSC) framework category indeed reflects MSCI’s scrutiny, so in yesterday’s announcement, issuers in that category have the potential to be removed from the constituents.
“This means that there is expected to be selling pressure on issuers listed in the HSC within MSCI constituents going forward,” he concluded.
For information, Morgan Stanley Capital International (MSCI) issued an announcement on 20 April 2026 assessing reforms in Indonesia’s capital market. This announcement follows the previous release on 27 January 2026, when rebalancing for the Indonesia index was suspended.
In the May 2026 index review, MSCI decided to maintain the temporary policy that has been in place for Indonesian securities. This policy includes freezing increases in Foreign Inclusion Factors (FIF) and Number of Shares (NOS), as well as not adding new stocks to the MSCI Investable Market Indexes (IMI).
Additionally, one of MSCI’s measures, consistent with its treatment of similar securities in other markets, is to remove securities identified by Indonesian authorities as part of the new High Shareholding Concentration (HSC) framework.
MSCI’s decision to execute the removal of HSC issuers in May will trigger a measurable restructuring of foreign portfolios. The removal of stocks such as BREN and DSSA is projected to force the liquidation of passive funds amounting to around Rp25.5 trillion.
With the JCI currently at the 7,500 level, the absence of buyers in the negotiated market could force significant price corrections for both stocks to find a new equilibrium point.