MSCI Flags Indonesian Capital Market Accessibility: Free Float Transparency to English-Language Information

Global index provider MSCI has issued several notes on the accessibility of the Indonesian capital market, ranging from transparency of shareholding structures and the availability of information in English to various operational restrictions for foreign investors. In the MSCI 2026 Global Market Accessibility Review, which assesses 79 markets, Indonesia was one of the emerging markets that experienced a downgrade in its assessment. MSCI highlighted structural issues, namely a lack of transparency in share ownership and indications of coordinated trading practices, which affect the Information Flow criteria. MSCI assessed that market accessibility concerns in Indonesia arise from a lack of transparency in shareholding structures and indications of trading behaviour that disrupt proper price formation. According to MSCI, this condition limits the ability of global institutional investors to assess the true free float of shares and to rely on market prices in the portfolio construction and index replication process. In line with these findings, MSCI downgraded Indonesia’s assessment on the Information Flow aspect from ‘+’ to ‘-’. ‘Concerns regarding investability persist due to limited transparency of shareholding structures and coordinated trading behaviour that disrupts proper price formation,’ MSCI wrote in its report. Additionally, MSCI noted that detailed information about the Indonesian stock market is not always available in English. This condition is considered one of the obstacles for foreign investors to obtain adequate information. Beyond transparency and market information aspects, MSCI also provided several other notes on the Indonesian capital market. Under the Equal Rights to Foreign Investors criterion, MSCI assessed that company-related information is not always readily available in English. On the Foreign Exchange Market Liberalization Level aspect, MSCI highlighted the absence of an efficient offshore foreign exchange market. Meanwhile, the domestic foreign exchange market still has several restrictions, including the requirement that foreign exchange transactions must be linked to securities transactions. In terms of Clearing and Settlement, MSCI noted that overdraft facilities for foreign investors are still prohibited. On the Transferability aspect, in-kind transfers of assets are only permitted under certain conditions. MSCI also noted that stock lending activity has been permitted in Indonesia but remains limited to certain stocks with a maximum contract borrowing duration of 90 days. Short selling has been allowed but is still accompanied by several restrictions. The market accessibility report is an important component in MSCI’s market classification assessment. Besides accessibility, MSCI also considers the level of economic development as well as market size and liquidity in determining a country’s status as a developed market, emerging market, frontier market, or standalone market. MSCI is scheduled to announce the results of the MSCI 2026 Annual Market Classification Review on 23 June 2026.