MSCI Downgrades Indonesia on Information Flow, Citing Ownership Opacity and Coordinated Trading

MSCI has highlighted several issues in the Indonesian capital market that it believes could disrupt the share price formation process and complicate investment for global institutional investors in the country. In its Global Market Accessibility Review 2026, MSCI downgraded Indonesia’s assessment on the Information Flow criterion. Indonesia became one of two Emerging Markets, alongside Turkey, to experience a downgrade in this aspect. MSCI assessed that the lack of transparency in share ownership structures, along with indications of coordinated trading, has raised concerns about the accessibility of the Indonesian capital market for global investors. According to MSCI, these conditions have the potential to disrupt the fair price formation process in the market. The issues of ownership transparency and trading practices deemed coordinated also limit the ability of international institutional investors to assess the actual free float amount. As a result, global investors are finding it increasingly difficult to use market share prices as a reliable reference for portfolio construction or index replication. MSCI also assessed that these conditions could reduce market transparency and hamper the price discovery mechanism, the process of forming prices that fairly reflect fundamental conditions. On this basis, MSCI lowered Indonesia’s rating on the Information Flow criterion from a previous ‘+’ to a ‘-’. The downgrade reflects heightened concerns among international investors regarding free float transparency and the quality of share price formation in the Indonesian market. In its explanation, MSCI stated that these concerns arose due to persistent opacity in share ownership structures and indications of coordinated trading behaviour that could disrupt proper price formation in the market. The Market Accessibility Review is an annual MSCI study used to assess the level of accessibility of a capital market for global institutional investors. The assessment covers various aspects, from openness to foreign investors and ease of capital flows to operational market efficiency, availability of investment instruments, and stability of the institutional framework. The latest MSCI report shows that within the Emerging Markets group, the main market accessibility issues remain related to foreign ownership openness and market infrastructure. However, for Indonesia specifically, the spotlight is on the quality of information flow, share ownership transparency, and the effectiveness of price formation in the capital market.