MSCI Inc. again decided to postpone its review on Indonesian equities, saying it needs more time to see whether recently announced transparency reforms are effective.
The index compiler said the country’s moves regarding enhanced disclosures, more granular investor classification and a roadmap to raise the minimum free-float requirement to 15% are a step in the right direction. Still, what matters for global investors is the consistent implementation and sustained effect of such measures in the market, it said in a Tuesday release.
“Should sufficient progress not be evident by the time of the November 2026 MSCI index review, MSCI will consider a range of options for the appropriate treatment for the Indonesia market, potentially including a consultation on the reclassification of Indonesia from emerging markets to frontier markets,” according to the statement.
The move is likely to deepen investor unease that’s built over months after MSCI in January flagged a potential downgrade to frontier status due to investability concerns and the limited number of shares available for public trading. The warning, which had triggered a market rout, prompted authorities to introduce a series of reforms.
