Rp 31 Trillion in Foreign Capital Predicted to Exit Stock Market

Equity Analyst at PT Indo Premier Sekuritas (IPOT) David Kurniawan estimates that foreign capital of Rp 30 to Rp 31 trillion could potentially exit the capital market ahead of the implementation of the Morgan Stanley Capital International (MSCI) index adjustment at the end of May 2026. The changes to the Indonesian stocks in the MSCI index will take effect after the market close on 29 May or on 1 June 2026. David explained that the MSCI rebalancing announcement, which removes 18 Indonesian stocks, has led the market to calculate the potential adjustment in foreign capital flows. “This could cause short-term selling pressure on the JCI ahead of the effective date of the index change, especially in the stocks removed from the index,” he told Tempo on Wednesday, 13 May 2026. Nevertheless, David assessed that this sentiment is not solely due to fundamental economic changes, but rather a reflection of the market’s reaction to expectations of foreign fund outflows and passive fund portfolio adjustments. He also stated that expectations of capital outflows would influence demand for foreign currency assets in the market, thereby impacting the exchange rate. Meanwhile, the Financial Services Authority (OJK) considers the MSCI rebalancing outcome for Indonesian stocks as a short-term consequence of efforts to reform the capital market. The Executive Head of Capital Market, Derivative Finance, and Carbon Exchange Supervision at OJK, Hasan Fawzi, said that his institution has taken into account the short-term impacts of the adjustment on stock prices. Hasan hopes that this MSCI adjustment will become a new basis for improving the quality of Indonesian stocks going forward. “This is our starting point to increasingly present the quality of listed stocks on the exchange, and of course, we hope that these stocks will then be promoted as investment choices for investors,” he said during a press conference at the Indonesia Stock Exchange, Jakarta, on Wednesday, 13 May 2026.