MSCI Rebalancing Effect: Beware of Selling Pressure on the JCI

JAKARTA, KOMPAS.com - The announcement of the Morgan Stanley Capital International (MSCI) index review results for Indonesia took place on Tuesday, 12 May 2026, US time. In other words, due to the time zone difference, the official announcement became accessible only in the early hours of Wednesday, 13 May 2026. One of the most anticipated aspects of the announcement is the changes to the stocks entering and exiting the international index. The announcement will take effect after the close of trading on Friday, 29 May 2026. This means it is unlikely that any new issuers will be added in this May review. Meanwhile, the current market focus is on the potential exit of several stocks (deletion) from the index. This particularly concerns issuers with high ownership concentration (High Shareholding Concentration or HSC). Issuers removed from global indices like MSCI will indeed face bitter consequences. This is because such issuers could be abandoned by foreign investors. The outflow of foreign funds is the primary impact on issuers exiting the MSCI index. This occurs because the MSCI index serves as a benchmark for global investment managers. Stocks that are delisted will trigger automatic selling actions by passive funds or Exchange-Traded Funds (ETFs) that replicate the index. The potential foreign fund outflow from this is estimated to reach very significant figures. Large-scale share sales by institutional investors in a short period will undoubtedly greatly affect share prices.