Response to MSCI Announcement: Airlangga Says Quarterly Evaluations Are No Problem

Jakarta, CNBC Indonesia - Coordinating Minister for Economic Affairs Airlangga Hartarto has spoken out regarding the new announcement issued by global index provider MSCI. Airlangga emphasised that the Indonesian capital market remains in a safe condition, as MSCI has decided to retain Indonesia in the emerging market category. Previously, MSCI had threatened that the Indonesian capital market could be downgraded to frontier market status if a number of systemic issues in the capital market sector were not resolved. Such a downgrade poses a real threat as it would result in foreign fund outflows from the Indonesian stock market, particularly from institutional investors using passive funds. Regarding MSCI’s notes and the threat of a downgrade to frontier market at the November evaluation, Airlangga admitted there was no problem with the evaluation and stressed that his side was even ready if the evaluation were conducted every three months. “If they want to evaluate, go ahead. Evaluating every three months is no problem. Can we really tell them not to evaluate anymore?” Airlangga said when met by journalists in Jakarta on Wednesday (24/6/2026). Global index provider MSCI had previously announced the results of the MSCI 2026 Market Classification Review in the early hours of Wednesday (24/6/2026). In the annual report, the Indonesian equity market was confirmed to remain in the Emerging Markets category. In the latest review, MSCI stated that international institutional investors frequently convey concerns to MSCI when they experience persistent non-transparency in shareholding structures and suspect coordinated trading behaviour. These two concerns materially limit investors’ ability to assess the true free float and to rely on observed market prices for portfolio construction and index replication, and both relate directly to the Information Flow and Market Infrastructure pillars of the MSCI Market Accessibility framework. Nevertheless, MSCI acknowledged recent transparency reforms announced by the Financial Services Authority (OJK), the Indonesia Stock Exchange (IDX), and the Indonesian Central Securities Depository (KSEI). These reforms include enhanced disclosure of shareholders with ownership above 1%, more detailed investor classification, the introduction of a High Shareholding Concentration (HSC) framework, and a roadmap to increase the minimum free float requirement to 15%. “While these announcements are a step in the right direction, what matters for international institutional investors is the consistent implementation and sustained effect of these measures across the market,” MSCI wrote in its latest report. MSCI stated it will continue to assess their scope, consistency, and ongoing effectiveness in the context of free float determination and broader investability assessment. “If adequate progress is not visible by the time of the MSCI November 2026 Index Review, MSCI will consider various options for the appropriate treatment of the Indonesian market, potentially including a consultation on reclassifying Indonesia from Emerging Market to Frontier Market,” MSCI wrote. For information, the next MSCI evaluation target will take place in November 2026.