Indonesia confident to keep MSCI emerging market status

Jakarta (ANTARA) - The Indonesian government remains confident that the country will retain its “emerging market” status ahead of an upcoming global classification review, despite a recent criteria downgrade by global index provider MSCI Inc.

In its 2026 Global Market Accessibility Review, MSCI maintained Indonesia’s emerging market status but downgraded its “Information Flow” score from positive to negative. Only Indonesia and Türkiye experienced the change, reflecting areas for improvement in stock ownership transparency and price formation.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the report should not be seen as a setback, arguing it reflects ongoing progress in financial market reforms.

“MSCI’s findings confirm that Indonesia’s economic fundamentals and market access remain strong. The focus is on transparency and market integrity, and that is what matters,” he said on Friday.

According to the report, Indonesia’s market accessibility, size, and liquidity remain solid, with no restrictions on foreign ownership.

However, improvements are needed in share ownership transparency and price formation, areas the government is actively addressing.

Airlangga said the government is working closely with the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) on a series of market reforms. These include raising the minimum free float requirement for listed companies from 7.5 percent to 15 percent to improve liquidity and trading efficiency.

Authorities are also strengthening ownership transparency through a beneficial ownership registry and regular disclosure of shareholders holding more than a 1 percent stake.

In parallel, reforms are underway to restructure the stock exchange ecosystem and encourage pension funds and insurance firms to allocate up to 20 percent of assets into blue-chip equities.

The government is also tightening corporate governance standards, strengthening enforcement, and improving inter-agency coordination.

Airlangga said these reforms are supported by strong macroeconomic fundamentals, including stable exchange rates, controlled inflation, and prudent fiscal management.

Bank Indonesia recently cut its benchmark interest rate to 5.75 percent in June 2026 to support economic stability and investor confidence amid global uncertainty.

“The combination of structural capital market reforms and macroeconomic stability will continue to strengthen the attractiveness and credibility of Indonesia’s market for global institutional investors,” he said.

MSCI is scheduled to announce its final decision on Indonesia’s market status during its Annual Market Classification Review on June 23, 2026.

Airlangga urged market participants to remain calm as the government continues coordination with MSCI and global investors ahead of the announcement.

Related news: Indonesia Stock Exchange raises free float threshold for IPOs

Translator: Bayu Saputra, Yashinta Difa

Editor: M Razi Rahman

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