TEMPO.CO, Jakarta - The global index provider Morgan Stanley Capital International (MSCI) has retained Indonesia as an emerging market in the market classification review released on Wednesday, June 24, 2026. In this category, Indonesia is aligned with other Asia-Pacific countries such as China, India, Korea, Malaysia, the Philippines, Taiwan, and Thailand.
In its statement, MSCI stated that institutional investors often express concerns about the transparency of stock ownership structures and suspicions of coordinated trading behavior. MSCI wrote in the Market Classification Review 2026 announcement, "Both of these concerns materially limit the ability of investors to assess the true free float and to rely on observed market prices as a reference for portfolio construction and index replication."
According to MSCI, both of these notes are directly related to the information flow and market infrastructure pillars of the MSCI market accessibility framework. They believe that these two issues cause market participants to be concerned about the feasibility of investing in Indonesia.
However, MSCI acknowledges the reform efforts made by the Financial Services Authority (OJK), the Indonesia Stock Exchange (IDX), and the Indonesia Central Securities Depository (KSEI). The reform measures include improving transparency of stock ownership above 1 percent, strengthening the granularity of investor classification, implementing a high stock ownership concentration framework, and raising the minimum free float to 15 percent.
"Although this announcement is a step in the right direction, it is important for international institutional investors that there is consistent implementation and sustainable effects of these measures across the market," said MSCI. Therefore, MSCI will continue to assess the coverage, consistency, and effectiveness of the implementation of these measures.
MSCI stated that if the Indonesian capital market does not show sufficient improvement until November 2026, they will consider various appropriate treatment options for Indonesia. These options include the potential consultation for reclassification from an emerging market to a frontier market.
Read: JCI, Rupiah Weaken Ahead of MSCI Decision
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