After MSCI Scrutiny, Lawmakers Flag Stock Market Governance Issues

RRI.CO.ID, Jakarta - The House of Representatives’ Commission XI has highlighted governance issues in Indonesia’s stock market raised by Morgan Stanley Capital International (MSCI), saying the 15 percent free-float policy is appropriate to reduce ownership concentration and prevent practices that harm investors.

“This is about proving that governance at Indonesia’s stock exchange is becoming more transparent and fair. The eight action plans for capital market integrity reform prepared by the government must be implemented in practice, not just discussed,” Commission XI lawmaker Anna Mu’awanah said in a press statement in Jakarta on Tuesday, February 3, 2026.

Anna placed particular emphasis on protecting retail investors, whose numbers continue to grow. She said the ongoing national stock exchange reforms were expected to create a healthy ecosystem for the wider public.

“Small investors must not be left to suffer losses by entering an unhealthy market. The state must ensure that our capital market has integrity so that all investors are protected,” Anna said.

Previously, Finance Minister Purbaya Yudhi Sadewa said the Jakarta Composite Index (JCI) would return to normal in the near term after the benchmark index plunged 8 percent, triggering a temporary trading halt on Wednesday, January 28, 2026.

“The market is still in shock. Tomorrow it will be flat. Next week, you will see it recover,” Minister Purbaya said at the Presidential Palace in Jakarta on Wednesday.

Minister Purbaya said Indonesia’s economic fundamentals remained strong and that the JCI would stabilize again. He added that the government was seriously pursuing improvements, including in the investment climate and tax and excise collection.

“Our fundamentals are good. We are seriously strengthening the economic foundation. Bank Indonesia and I are now more aligned in monetary and fiscal policies, and the investment climate continues to be improved,” Minister Purbaya said.

He said the JCI’s decline was triggered by MSCI’s preliminary report, which highlighted insufficient transparency in Indonesia’s stock market, widespread “pump-and-dump” practices, and free-float requirements for listed companies.

Minister Purbaya described the market reaction to the MSCI report as excessive. He said he had contacted the Financial Services Authority (OJK), which promised that market improvements would be completed by May 2026.

“I think this is an overreaction, because this is only the first report. There is still time for implementation until May,” Minister Purbaya said. (Gusti Panji/Lasti Martina)