OJK states that changes in MSCI index composition are also experienced by other Asian stocks
Jakarta (ANTARA) - The Chair of the Financial Services Authority (OJK) Board of Commissioners, Friderica Widyasari Dewi, stated that the adjustment to the Morgan Stanley Capital International (MSCI) index composition is not only experienced by Indonesian stocks but also occurs in several other Asian countries.
For example, in the MSCI Global Standard Index, Japan recorded 14 issuers exiting, Taiwan seven issuers exiting, Malaysia six issuers exiting, and South Korea three issuers exiting. Meanwhile, China, although adding 22 new issuers, also experienced 24 issuers exiting the index.
“So this reflects global portfolio allocation adjustments and fairly broad market dynamics in the region, not merely Indonesia-specific issues,” said Friderica, who is familiarly known as Kiki, in Jakarta on Wednesday.
According to her, the changes in the MSCI index composition are part of a periodic review mechanism based on several objective parameters, such as market capitalisation, free float, liquidity, and share price dynamics.
This phenomenon is not only occurring in Indonesia but also in almost all Asia-Pacific markets in this review.
Nevertheless, OJK views this situation as an important reminder to continue strengthening the quality and depth of Indonesia’s capital market.
“OJK, together with all stakeholders, will continue to encourage the strengthening of market integrity, improvement of free float and liquidity, expansion of the investor base, and enhancement of issuer governance so that the competitiveness of Indonesia’s capital market becomes stronger and sustainable,” she said.
Furthermore, Kiki also assured that the fundamentals of Indonesia’s financial services sector remain resilient and stable.
According to her, short-term volatility or global index changes do not alter OJK’s commitment to continue building a healthy, transparent, and credible market for domestic and global investors.
“Going forward, we will also continue to strengthen coordination with the Indonesia Stock Exchange (BEI), self-regulatory organisations (SROs), and all market participants to ensure that Indonesia’s capital market becomes increasingly attractive, liquid, and investable in the long term,” she added.
MSCI, the global index provider, announced the results of the review of the Indonesian market index in the MSCI May 2024 Index Review.
In the review results, six Indonesian stocks were officially removed from the MSCI Global Standard Index. The six stocks are PT Amman Mineral Internasional Tbk (AMMN), PT Barito Renewables Energy Tbk (BREN), PT Chandra Asri Pacific Tbk (TPIA), PT Dian Swastatika Sentosa Tbk (DSSA), PT Petrindo Jaya Kreasi Tbk (CUAN), and PT Sumber Alfaria Trijaya Tbk (AMRT).
Meanwhile, in the MSCI Small Cap Index, MSCI included the shares of PT Sumber Alfaria Trijaya Tbk (AMRT) in the small cap index or MSCI Global Small Cap Index.
On the other hand, MSCI removed several stocks from the MSCI Global Small Cap Index. Those stocks are PT Aneka Tambang Tbk (ANTM), PT Astra Agro Lestari Tbk (AALI), PT Bank Aladin Syariah Tbk (BANK), PT Bumi Serpong Damai Tbk (BSDE), PT Dharma Satya Nusantara Tbk (DSNG), PT Industri Jamu dan Farmasi Sido Muncul Tbk (SIDO), PT Midi Utama Indonesia Tbk (MIDI), PT Mitra Keluarga Karyasehat Tbk (MIKA), PT MNC Digital Entertainment Tbk (MSIN), PT Pabrik Kertas Tjiwi Kimia Tbk (TKIM), PT Pacific Strategic Financial Tbk (APIC), PT Sawit Sumbermas Sarana Tbk (SSMS), and PT Triputra Agro Persada Tbk (TAPG).