MSCI Urges Indonesia to Show Reform Results: Economist

RRI.CO.ID, Jakarta - Indonesia’s capital market has retained its Emerging Market status in the latest assessment by Morgan Stanley Capital International (MSCI). Global investors, however, are now focusing on verifying the effectiveness of reforms already implemented.

Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian said the results of MSCI’s 2026 Market Classification Review mark a new phase for the national capital market. According to him, the focus has shifted from policy formulation to the successful implementation of reforms in daily market activities.

“Global investors are looking for tangible improvements in transparency, sound price formation, the quality of oversight, and market integrity,” Fakhrul said in Jakarta on Wednesday, June 24, as quoted by Antara.

He viewed MSCI’s decision to maintain Indonesia’s Emerging Market status as a positive signal for the domestic capital market. The move reduces the short‑term risk of a downgrade while recognizing reforms carried out by regulators. “This indicates that global markets see tangible progress in efforts to strengthen the quality of Indonesia’s capital market,” he said.

Fakhrul emphasized that retaining Emerging Market status not only benefits the stock market but also strengthens investor perceptions of Indonesia’s broader financial ecosystem. “MSCI is no longer asking Indonesia to introduce new reforms. MSCI is now calling on Indonesia to prove that the reforms already implemented are truly effective,” he said.

He noted that the quality of capital market infrastructure remains a key concern for MSCI. Consistent policy implementation, regulatory enforcement, and improvements in market oversight will be decisive factors ahead of the next evaluation in November 2026.

“In my view, there is still enough time. The most crucial point is that most of the key reform frameworks are already in place -- we’re not starting from scratch,” Fakhrul said.

He added that Indonesia’s capital market is in a stronger position than it was several months ago, with reduced uncertainty over the reform direction and regulators showing swift responses to international investor feedback.

Still, he cautioned that risks have not fully disappeared, noting that November 2026 will be a critical point for evaluating whether reforms can sustainably improve market quality. ***