OJK Responds to MSCI Removing 18 Indonesian Stocks from Global Index

Jakarta (ANTARA) - The Financial Services Authority (OJK) has responded to the removal of 18 Indonesian stocks from the Morgan Stanley Capital International (MSCI) global index as a short-term consequence of reforms to improve integrity and transparency in Indonesia’s capital market.

“This balancing consequence from MSCI announced today is certainly part of the short-term consequences of the integrity reform process we have introduced,” said the Executive Head of the Capital Market, Derivatives Finance, and Carbon Exchange Supervisory, who also serves as a Commissioner of OJK, Hasan Fawzi.

During a press conference at the Indonesia Stock Exchange building in Jakarta on Wednesday, Hasan Fawzi stated that the reform steps began in February 2024 through eight action plans to accelerate integrity reforms in Indonesia’s capital market.

According to Hasan, one of the main focuses of the reforms is to address global investors’ and index providers’ such as MSCI’s concerns regarding the transparency of share ownership structures in Indonesia’s capital market.

These provisions apply directly to issuers planning initial public offerings (IPOs), while existing issuers are given a transition period to adjust.

In addition, OJK is encouraging the Indonesia Stock Exchange to open data on share ownership above 1 per cent to the public, provide detailed investor classifications, and publish high shareholding concentrations.

With these new regulations, several stocks no longer meet MSCI criteria due to increasingly open ownership structures or share price declines since the reforms were implemented.