MSCI launches consultation to reclassify Indonesia as standalone market over governance concerns

MSCI warned that persistent problems such as unclear ownership structures, high share concentration and alleged coordinated trading are eroding the investability of Indonesia’s equity market. On that basis, the index provider opened a consultation to consider reclassifying the country from emerging-market to standalone-market status, with the review period ending on April 30 2027 and a final decision due by June 30. MSCI also said it will maintain a freeze on additions to the MSCI Indonesia Investable Market Index and on adjustments to foreign inclusion factors.

Indonesian regulators have responded with tighter shareholder-disclosure requirements and a plan to enforce a minimum 15 % free float, yet MSCI says it has not seen consistent evidence of material market improvements. The proposal arrives as Moody’s and Fitch have shifted Indonesia’s sovereign rating outlook to negative and the Jakarta stock index has fallen more than 30 % this year, making it the poorest-performing market in emerging Asia.