MSCI Keeps Indonesia in Emerging Market, Flags Transparency Issues

RRI.CO.ID, Jakarta - The Indonesia Stock Exchange (IDX) remains classified as an Emerging Market in the Morgan Stanley Capital International (MSCI) global capital markets index, easing investors’ concerns about a possible downgrade of the national capital market’s classification.

In its Global Market Accessibility Review 2026, MSCI confirmed Indonesia’s position in the emerging markets group. However, the global index provider highlighted several factors that continue to weigh on the attractiveness of the Indonesian capital market to international investors.

MSCI flagged two main concerns: limited transparency in share ownership structures and indications of coordinated trading that could distort fair stock-price formation. These conditions pose challenges for global institutional investors in assessing the actual free float and relying on market prices as a benchmark for investment decisions.

“Transparency in ownership structures remains limited, and coordinated trading patterns persist. This is not a new issue, but a concern that has existed since January 2026,” said the Mirae Asset Sekuritas analyst team in Jakarta on Friday, June 19, 2026.

MSCI noted similar issues in the Turkish stock market, particularly among small-cap issuers. Such practices are seen as undermining market transparency and hindering the formation of prices that reflect corporate fundamentals.

Reflecting these concerns, MSCI downgraded Indonesia’s Information Flow criteria from positive to negative. The change underscores ongoing doubts among global investors about the transparency of the free float and the reliability of stock-pricing mechanisms on the IDX.

Even so, Mirae Asset emphasized that the absence of downgrades in other accessibility aspects sends a stronger signal to the market. “We expect Indonesia to retain its Emerging Market status in the review scheduled for June 24,” the team said.

The MSCI report will serve as one of the bases for the upcoming global capital market classification review, set to be announced on June 24. Market participants are expected to closely monitor the outcome, as it could influence the flow of foreign investment into Indonesia. (Gusti Panji)