MSCI Removes 19 Indonesian Stocks, Analysts See IHSG Nearing Turning Point
JAKARTA, KOMPAS.com - The decision by Morgan Stanley Capital International (MSCI) to remove 19 Indonesian stocks from its global index has triggered pressure on the domestic stock market. However, market participants are advised not to get caught up in panic selling, as the changes are considered more technical in nature rather than reflecting any fundamental weakening of the issuers.
The stock market reacted immediately following the announcement of the MSCI rebalancing results on 12 May 2026. The pressure is expected to come from global passive fund managers who use the MSCI index as a benchmark for investments.
Co-Founder of PasarDana and capital market practitioner, Hans Kwee, believes that the removal of several stocks from the MSCI index does not necessarily indicate any fundamental damage to the companies.
“Market participants should remain calm and not get trapped in panic selling. The removal of several issuers from this index is more technical in nature, related to weighting methodology and liquidity,” said Hans in his statement on Wednesday (13/5/2026).
“Passive fund managers will partly utilise the final period on 29 May to rebalance their portfolios in line with the MSCI announcement,” Hans added.
Previously, MSCI officially announced the results of the periodic review or index review for May 2026 on Wednesday (13/5/2026). This rebalancing result is considered surprising to market participants as it deviates significantly from expectations.
In this adjustment, MSCI removed six Indonesian stocks from the MSCI Global Standard Indexes, namely AMMN, BREN, TPIA, DSSA, CUAN, and AMRT.
Although removed from the MSCI Global Standard Indexes, AMRT stock has been moved to the MSCI Small Cap Indexes.
In addition, MSCI also removed 13 Indonesian stocks from the MSCI Small Cap Indexes, namely ANTM, AALI, BANK, BSDE, DSNG, SIDO, MIDI, MIKA, TKIM, APIC, SSMS, TPAG, and MSIN.
Senior Market Analyst at Mirae Asset Sekuritas, Nafan Aji Gusta, stated that the exit of Indonesian stocks from the MSCI Global Standard Indexes has the potential to trigger selling actions by foreign investors, particularly from fund managers who use MSCI as a portfolio investment benchmark.
“In my view, outflows will certainly occur as well. Usually, if fund managers reference the MSCI standard, they will be forced to sell those stocks to adjust to the latest index composition,” said Nafan when contacted by Kompas.com on Wednesday morning.
Hans believes that the short-term volatility resulting from the MSCI rebalancing actually opens up accumulation opportunities on blue-chip stocks as well as small-cap sectors that have corrected anomalously due to forced selling pressure from passive fund managers.
“Behind this short-term volatility, opportunities open up to accumulate blue-chip stocks and small-cap sectors whose prices have corrected anomalously due to panic and forced selling pressure,” he said.
According to Hans, this MSCI announcement can also serve as a momentum for evaluating Indonesia’s capital market to strengthen transparency and investor protection.