MSCI Could Downgrade Indonesian Stock Weightings, OJK and BEI Prepare This

Jakarta, CNBC Indonesia - The Financial Services Authority (OJK) and the Indonesia Stock Exchange (BEI), as capital market regulators, are preparing strategies to mitigate the decline in the Composite Stock Price Index (IHSG) resulting from policy adjustments by Morgan Stanley Capital International (MSCI). It is known that MSCI’s policy adjustments could potentially cause the weightings of Indonesian issuers’ stocks to be downgraded due to rules on meeting the number of publicly circulating shares or free float. “BEI is preparing risk mitigation if our index falls due to MSCI,” said the Head of the Executive for Capital Market Supervision, Derivative Finance, and Carbon Exchange of the Financial Services Authority (OJK), Hasan Fawzi, during a virtual press conference on Monday (6/4/2026). Hasan explained that from late March 2026 to early April 2026, Indonesia’s stock exchange regulators, including OJK, have completed the implementation of all major proposals submitted to the global index provider. The efforts are part of credible capital market sector transparency and prioritise investor protection aspects. “We are optimistic that the concrete steps presented will strengthen stakeholder confidence in the quality of transparency of our capital market,” he stated. In this regard, OJK has prepared measured steps, one of which is a free float policy of 15% that will run alongside strengthening demand. On the other hand, capital market regulators are also continuously communicating intensively with global index providers. “Including conveying progress to their subsequent evaluations, then we will routinely monitor market conditions to respond by taking additional policies professionally,” he added. Hasan asked investors not to respond reactively if there is a decline in index weightings. He admitted that the ongoing capital market reforms will have an impact in the short term. “This may involve portfolio adjustments by domestic or global investors, which could trigger temporary selling pressure, as well as potential outflows during rebalancing, and volatility and widening bid-ask spreads on certain stocks,” he explained. However, according to Hasan, these dynamics are transitional and temporary responses. This is part of unavoidable progress. The main focus of capital market regulators is to build a foundation of market integrity that is transparent, credible, and consistently growing.