MSCI Retains Indonesia's Emerging Market Status, Airlangga Says Market Accessibility Remains Strong

Coordinating Minister for Economic Affairs Airlangga Hartarto stated that MSCI’s decision to retain Indonesia in the Emerging Market category is a positive signal for the competitiveness and accessibility of the national capital market. According to Airlangga, the decision shows that Indonesia still meets the key indicators characterising an emerging market and remains a notable investment destination for global investors. “The decision confirms that the Indonesian capital market still meets the main characteristics of an emerging market and remains part of the group of global investment destination countries,” Airlangga said in a statement in Jakarta on Thursday (26/6). MSCI Inc., through its 2026 Market Classification Review results released on 23 June local time, decided not to change Indonesia’s classification. Furthermore, MSCI did not open a consultation regarding a potential downgrade of Indonesia’s status from Emerging Market to Frontier Market. Although Indonesia’s status was maintained, the government is taking note of several points raised by MSCI as evaluation material to strengthen the quality and governance of the domestic capital market. In its report, MSCI highlighted the need for increased transparency of share ownership and the strengthening of integrity in the market’s price formation process. MSCI noted that some global institutional investors remain concerned about the level of information disclosure regarding share ownership. Additionally, there are concerns about indications of coordinated trading practices that could potentially affect free float assessments and the reliability of market prices as an investment reference. On the other hand, MSCI appreciated various reform measures undertaken by the government together with the Financial Services Authority (OJK), the Indonesia Stock Exchange (BEI), and the Indonesian Central Securities Depository (KSEI). Reforms that received positive attention include increased disclosure of shareholder identities with ownership above 1%, refinement of investor classification, implementation of the High Shareholding Concentration (HSC) framework, and the gradual implementation of a roadmap to increase the minimum free float threshold to 15%. The government, along with OJK, BEI, KSEI, and Bank Indonesia, expressed its commitment to accelerating various reform agendas before the next evaluation cycle in the MSCI Index Review in November 2026. These steps include strengthening market supervision, increasing share ownership transparency, improving issuer governance, reinforcing trading transaction integrity, and implementing more effective and consistent law enforcement. Airlangga emphasised that the government will also maintain intensive communication with MSCI and global investors so that the progress of reforms can be reflected in future market accessibility assessments. In addition, efforts to deepen the financial market will continue to increase liquidity, expand domestic investor participation, strengthen the quality of price formation, and improve overall market efficiency. According to Airlangga, this year’s MSCI review results serve as an important momentum to accelerate the transformation and reform of the Indonesian capital market. “Indonesia’s continued status as an Emerging Market shows that the national economic fundamentals and market accessibility remain strong. The government appreciates MSCI’s input as part of a joint effort to improve the quality of the capital market. Our focus is to ensure that every reform agenda does not stop at the policy level, but is consistently implemented to have a real impact on transparency, market integrity, and investor confidence,” Airlangga said. He further assessed that sustainable reforms, supported by solid economic fundamentals and maintained macroeconomic stability, will further strengthen Indonesia’s position as one of the main investment destinations in the region. These measures are also believed to be able to maintain Indonesia’s status as an Emerging Market country in the eyes of global investors.