OJK Anticipates Potential Market Volatility Ahead of Tomorrow's MSCI Announcement

Jakarta, CNBC Indonesia - The Financial Services Authority (OJK) is anticipating potential market volatility ahead of the announcement of the results of the global index review by Morgan Stanley Capital International (MSCI).

According to the schedule, MSCI will announce the results of the global index review, including the MSCI Indonesia Index, on 12 May 2026. The review covers several indices from MSCI Global Standard Indexes, MSCI Global Small Cap, MSCI Micro Cap Indexes, to MSCI Frontier Markets Small Cap Indexes, while the rebalancing will be published on 29 May 2026.

OJK Board Chair Friderica Widyasari Dewi stated that they are still awaiting the results of that MSCI rebalancing announcement. She noted that MSCI had previously implemented a freeze, so no new shares entered, but existing shares could potentially exit the index.

“Tomorrow, we’ll wait, but as I’ve always said, we’re making improvements, so there’s a possibility that some shares will be adjusted. This is called index rebalancing, so even if the announcement comes tomorrow, we’ll wait,” said Friderica, when met at the Indonesia Stock Exchange (BEI) building in Jakarta on Monday (11/5/2026).

According to her, the reform steps and strengthening of market integrity carried out by the regulator could indeed lead to short-term impacts on the stock market. However, OJK assesses that these steps will provide greater benefits in the long term.

“Even if there are short-term adjustments, we see this as short-term pain. But, Insha’Allah, long-term gain,” said Friderica.

Friderica also addressed concerns about the possibility of Indonesia being downgraded to frontier market status in the upcoming MSCI review in June. She hopes Indonesia will remain as an emerging market, given the improving quality of information disclosure and domestic market integrity.

“That’s in June, hopefully not (downgraded to frontier market). Because if we look at the granularity of the data, information openness, that might be one of the best for the openness and integrity that we’ve conveyed,” she said.

OJK also urges all market participants, including the media, to help maintain market sentiment amid various possibilities that could occur after the MSCI announcement. The regulator views short-term volatility as part of the process of reforming Indonesia’s capital market.