Tomorrow's MSCI "Rebalancing" Announcement: Danantara Says Indonesia's Capital Market is Improving

JAKARTA, KOMPAS.com - The Indonesia Investment Management Agency (Danantara) is optimistic that the capital market will remain stable ahead of the announcement of the Morgan Stanley Capital International (MSCI) global index rebalancing on Tuesday (12/5/2026). According to Danantara’s Chief Investment Officer (CIO) Pandu Sjahrir, the condition of Indonesia’s capital market is beginning to show improvement in line with the reforms being carried out by the Financial Services Authority (OJK). “Let’s just wait and see tomorrow. I see the developments in the stock exchange are good in terms of the implementations being carried out. Insyaallah, tomorrow will be fine,” he said at the Office of the Coordinating Ministry for Food, Jakarta, on Monday (11/5/2026). Pandu is also confident that Indonesia’s capital market will not be downgraded from emerging market to frontier market in the MSCI rebalancing. According to him, today’s movement in the Composite Stock Price Index (IHSG) is more influenced by external factors such as the rupiah exchange rate rather than MSCI issues. “Today, you can see there are changes as well. I think it’s not related to MSCI today, more about the rupiah and all sorts of things,” he said. Index rebalancing is the process of adjusting the composition of shares in an index. This step is carried out periodically so that the index continues to reflect the current market conditions based on several predetermined criteria, such as market capitalisation, share liquidity levels, and the issuer’s industrial sector. The adjustment of Indonesian-origin shares in the MSCI rebalancing is considered a normal matter. It is said to be part of the consequences of various improvements being made by the capital market authorities to the domestic exchange. In the rebalancing, MSCI will apply special treatment to certain shares, particularly those assessed to have high shareholding concentration (HSC). According to him, in terms of data granularity, information openness, and market integrity, Indonesia is considered to have very good quality. This is hoped to be one of the considerations for MSCI in maintaining Indonesia’s position as part of the emerging market. “Because if we look at data granularity, information openness, we might be one of the best for the openness and integrity that we convey. So hopefully this also becomes a consideration so that Indonesia remains in the emerging market,” he said when met at the Indonesia Stock Exchange (BEI) Building, on Monday (11/5/2026).