MSCI Retains Indonesia's Emerging Market Status, Airlangga Highlights Reform Commitment

Coordinating Minister for Economic Affairs Airlangga Hartarto assessed that Morgan Stanley Capital International’s (MSCI) decision to retain Indonesia in the Emerging Market category demonstrates that capital market accessibility remains well-maintained. He stated that the MSCI decision confirms Indonesia’s capital market still meets the key characteristics of a developing market. “And remains part of the global investment destination group,” Airlangga said in a statement on Thursday, 25 June 2026.

Global index provider MSCI, in its 2026 Market Classification Review results announced on 23 June 2026, did not reclassify Indonesia nor open consultations regarding a potential change in status from Emerging Market to Frontier Market. However, Airlangga noted that the government continues to carefully consider several inputs from MSCI to strengthen the quality of capital market governance. MSCI highlighted the need for increased transparency in share ownership structures and integrity in price formation in the market.

According to MSCI, global institutional investors remain concerned about the disclosure of share ownership information and indications of coordinated trading that could potentially affect free float assessments and the reliability of market prices as investment benchmarks. On the other hand, MSCI appreciated several reforms undertaken by the government together with the Financial Services Authority (OJK), the Indonesia Stock Exchange (BEI), and the Indonesian Central Securities Depository (KSEI).

These reforms include increased disclosure of shareholder identities with ownership above 1 percent, refinement of investor classification, implementation of a High Shareholding Concentration (HSC) framework, and the gradual implementation of a roadmap to increase the minimum free float to 15 percent. The government, together with OJK, BEI, KSEI, and Bank Indonesia, is committed to accelerating the implementation of various reform agendas before the next evaluation in the MSCI Index Review cycle in November 2026.

These steps include strengthening market supervision, increasing share ownership transparency, improving the governance of listed companies, reinforcing trading integrity, and more effective law enforcement. Airlangga added that the government will also continue to maintain active communication with MSCI and global investors to ensure that reform progress is reflected in the assessment of Indonesia’s market accessibility. Furthermore, the government will continue efforts to deepen financial markets to increase liquidity, expand the domestic investor base, strengthen the quality of price formation, and improve market efficiency. Airlangga emphasised that the results of this year’s MSCI review serve as momentum to accelerate national capital market reforms.