MSCI Revises Index Rules Following Freeze on Indonesian Stocks

Global index provider MSCI has revised its screening methodology for stocks experiencing extreme price increases (EPI), effective from the August 2026 Index Review. Under the new rules, stocks flagged with an EPI that have a Foreign Inclusion Factor (FIF) of 0.75 or higher are now excluded from the EPI screening, allowing them potential entry into the MSCI Global Standard Indexes provided they meet all other inclusion criteria. For EPI-flagged stocks with an FIF below 0.75, those not currently in the MSCI Investable Market Indexes (IMI) will be prevented from joining the Standard Index and will instead remain in the market investable universe for re-evaluation at the next review. Existing constituents of the MSCI Small Cap Indexes that are flagged with an EPI will be assessed based on their market capitalisation relative to the Standard Index size-segment cut-off. If their full market cap or free float-adjusted market cap falls below 1.8 times the cut-off, they will remain in the Small Cap Index; otherwise, they will be deleted from the Small Cap Index and placed in the market investable universe. This methodology update follows MSCI’s decision to freeze the inclusion of several Indonesian stocks, which resulted in the removal of six companies from the MSCI Global Standard Index effective 29 May 2026. Consequently, Indonesia’s representation in the index is now heavily concentrated, with major banks such as Bank Central Asia, Bank Rakyat Indonesia, and Bank Mandiri, alongside Astra International and Telkom Indonesia, maintaining their positions.