MSCI Deadline Looms Closer, Retail Investors Can Target Fundamental Stocks That Pay Dividends

JAKARTA, KOMPAS.com - The deadline related to the warning from Morgan Stanley Capital International (MSCI) is drawing ever closer. The stock exchange and the Financial Services Authority (OJK) are showing seriousness in overhauling the market structure and accepting input from market participants.

Senior Portfolio Manager for Equity at Manulife Asset Management Indonesia, Rizki Ardhi, stated that the availability of more granular and transparent data, along with significantly improved information disclosure, represents a very positive development for the market.

If the worst-case assumption occurs, Indonesia will experience a downgrade from emerging market to frontier market status.

In that worst-case scenario, there will undoubtedly be significant selling pressure from foreign investors who must adjust their portfolios. On the other hand, there will also be investors seeking opportunities to buy stocks at very cheap valuations.

“Therefore, investors should focus on positioning their portfolios in stocks that have strong fundamentals with cheap valuations, capable of generating free cash flow that can be used for dividend payouts or buybacks,” he said in a written statement on Friday (17/4/2026).

He added that these stocks have a higher probability of attracting investor attention when their valuations drop.

Nevertheless, Rizki said that in a more positive scenario or if geopolitical conflicts ease and MSCI maintains Indonesia’s inclusion in the emerging market equity index, investors can adopt a different strategy.

“Stocks sensitive to the US dollar and global crude oil prices will move upwards more quickly. However, in the long term, we see the consumer sector, which is already quite cheap, becoming positive due to declining input costs such as raw materials and operational expenses, as well as the acceleration of Indonesia’s economic growth,” he explained.