MSCI Maintains Freeze on Indonesian Stocks in August Review
Global index provider Morgan Stanley Capital International (MSCI) has decided to maintain the freeze on Indonesian stocks in its August 2026 index review. Consequently, the stock freeze that commenced in January this year will continue.
In its announcement, MSCI stated it will continue to freeze all increases in Foreign Inclusion Factors (FIF) and the number of shares. MSCI will also not add Indonesian stocks to the MSCI Investable Market Index. Furthermore, MSCI is maintaining the freeze on upward migrations across all index size segments, including from the Small Cap Index to the Standard Index.
“Additionally, MSCI will continue to remove securities identified by Indonesian authorities as part of the high shareholding concentration (HSC) framework,” MSCI wrote in its announcement on Tuesday, 7 July 2026. MSCI also stated it will continue to use 1 per cent shareholder disclosure data to adjust free float estimates where necessary.
This ongoing freeze follows MSCI’s decision to maintain Indonesia’s status as an emerging market during its market classification review in June. Although maintained, MSCI stated it will continue to review the implementation of Indonesian capital market reforms until November.
“While this announcement is a step in the right direction, what is important for international institutional investors is the consistent implementation and sustained effect of these measures across the market,” MSCI stated in its release on Wednesday, 24 June 2026.
MSCI indicated that if the Indonesian capital market does not show adequate progress by November 2026, it will consider various options for appropriate treatment for Indonesia, including the potential consultation regarding a downgrade from emerging market to frontier market.
Hasan Fawzi, the Executive Head of Capital Market Supervision, Derivatives, and Carbon Exchange at the Financial Services Authority (OJK), denied that MSCI is “leaving the decision hanging” regarding Indonesia’s market classification until November 2026. According to him, MSCI’s notes should not be interpreted as an imminent risk of a downgrade to frontier market this coming November.
“That is not correct. What exists is the demand for us to implement reforms consistently and effectively,” Hasan told reporters at the Indonesia Stock Exchange on Tuesday, 30 June 2026.
He explained that if, by November, MSCI assesses that the reform agenda has not been implemented consistently, Indonesia will be placed on the MSCI Consultation List.