Why Investors Should Not Panic Due to MSCI Rebalancing

Co-founder of PasarDana, Hans Kwee, believes investors should remain calm and avoid getting caught up in panic selling following the Morgan Stanley Capital International (MSCI) announcement. According to him, the removal of several issuers from the MSCI index is more technical in nature, related to weighting methodology and liquidity, rather than directly reflecting damage to the companies’ fundamentals.

“Moreover, many market participants and fund managers have anticipated the removal of those shares by MSCI in recent months,” Hans said in a written statement on Wednesday, 13 May 2026. He stated that some passive fund managers will utilise the final period on 29 May 2026 to rebalance their portfolios in line with the MSCI announcement.

Hans opines that behind this short-term volatility, there are opportunities to accumulate blue-chip stocks and small-cap sectors whose prices have anomalously corrected due to panic and forced selling pressure from passive fund managers. He said this momentum can be utilised by Indonesian investors to objectively evaluate their portfolios.

Separately, the Head of Executive for Capital Market, Derivatives Finance, and Carbon Exchange Supervision at the Financial Services Authority (OJK), Hasan Fawzi, assesses that the correction in the Composite Stock Price Index (IHSG) is still within reasonable limits amid the MSCI announcement.

“If we look at the affected stocks, none of them have experienced, for example, an auto rejection lower or touching the lowest permitted price today,” Hasan said during a press conference at the Indonesia Stock Exchange, Jakarta, on Wednesday, 13 May 2026. He also mentioned that the average transaction value, volume, and frequency remain quite good.

On trading Wednesday, 13 May 2026, the IHSG opened at 6,763. Then, at the close of the first session, the IHSG weakened by 1.81 percent to 6,734.5. The transaction volume reached 26.1 billion shares with a value of Rp 10.27 trillion. Meanwhile, the transaction frequency reached 1.47 million times.

Based on the MSCI announcement on Wednesday, 13 May 2026, six stocks were removed from the Global Standard Index. One of the six stocks, PT Sumber Alfaria Trijaya Tbk (AMRT) or Alfamart, was included in the Global Small Cap Index. Then, there are 13 stocks removed from the Global Small Cap Index.