MSCI Delays Rebalancing, Indonesian Market Avoids Rp 120 Trillion Outflow, Uncertainty Looms
JAKARTA, KOMPAS.com - MSCI’s decision to delay the rebalancing of the MSCI Indonesia Index until June 2026 delivers two impacts at once. The risk of a market status downgrade is temporarily eased. Uncertainty over the market’s direction persists for longer.
PT Henan Putihrai Asset Management notes that this postponement prevents Indonesia from potentially dropping to frontier market category. If that occurred, global passive fund outflows were estimated to reach $7.8 billion or approximately Rp 120 trillion.
“However, on the other hand, the rebalancing postponement does not fully eliminate uncertainty among investors as it extends the period of uncertainty regarding the direction of MSCI’s next evaluation,” wrote Henan Asset in its research on Thursday (23/4/2026).
Several steps undertaken include the implementation of High Shareholding Concentration as in Hong Kong, openness of share ownership data above 1 percent as in India, as well as an increase in the minimum free float limit. These changes are also accompanied by strengthening investor classifications.
These steps are deemed not merely technical adjustments. The policy direction points towards improving market structure to make it more transparent and credible in the eyes of global investors.
Experiences from other countries provide an overview of the impact of similar policies. India serves as one example. In 2023, the Indian market faced scrutiny regarding the ownership structure of large issuers.
Formally, the shares are listed as public. Substantively, some remain connected to controlling shareholders. This finding prompted MSCI to review the free float factor.
“This finding prompted MSCI to review the free float adjustment factor, which resulted in weight reductions and the exclusion of some stocks from the Nifty 50 index,” wrote Henan Asset.
The market then recovered. Within six months, the index returned to its initial level. By year-end, the index even rose by around 18 percent. This recovery reflects the return of institutional investor confidence.