IHSG Weakens as MSCI Halts Indonesian Stock Index Rebalancing

January 28, 2026 | 12:17 pm

TEMPO.CO, Jakarta - Indonesia Composite Index (IHSG) on Wednesday morning, January 28, 2026, weakened as a result of Morgan Stanley Capital International's (MSCI) announcement of a temporary hold on rebalancing Indonesian stocks.

The IHSG opened weaker by 597.75 points or 6.66 percent at 8,382.48. Meanwhile, the group of 45 leading stocks, or the LQ45 index, fell by 55.95 points or 6.39 percent to 820.16.

"From the market perspective, MSCI's decision has the potential to put pressure on the movement of IHSG, especially in the short to medium term. Freezing the increase in Indonesia's stock weight in the MSCI index restrains the potential passive fund flow from global investors. Yet, index funds and ETFs have been one of the main supports for demand in large-cap stocks in Indonesia," said Analyst and Stocknow.id Founder Hendra Wardana to ANTARA in Jakarta on Wednesday.

MSCI just announced the results of the global consultation regarding the evaluation of Indonesian stocks' free float. This issue immediately became the main focus of market participants.

In the process, some global investors did indeed welcome the plan to use the Monthly Ownership Composition Report from the Indonesian Central Securities Depository (KSEI) as an additional reference. In general, however, most investors still have major concerns about the reliability of the shareholder classification.

"They believe that the data does not yet fully depict the actual ownership structure, which makes it difficult to assess the level of free float of Indonesian stocks," Hendra said.

MSCI also assessed that although the Indonesia Stock Exchange (IDX) has made several minor improvements related to free float data, fundamental issues regarding the investability of the Indonesian stock market remain unanswered. Global investors highlight the low transparency of the stock ownership structure and express concerns about the potential for coordinated transactions.

"This condition is feared to disrupt the mechanism of establishing fair prices and increase the risk of unhealthy volatility in the market," Hendra said.

In response to this situation, MSCI has implemented an immediate freeze policy. The policy includes freezing all increases in the Foreign Inclusion Factor and Number of Shares, both stemming from index reviews, including the February 2026 Review, as well as from corporate actions.

Furthermore, MSCI will not add new Indonesian stocks to the MSCI Investable Market Indexes, nor will it increase stock size segments, such as transfers from the Small Cap category to the Standard Index.

The policy aims to reduce the risk of excessive index turnover and give time for Indonesian market authorities to make more comprehensive transparency improvements.

This morning in the Asian regional stock exchange, the Nikkei index weakened by 934.69 points or 0.55 percent to 53,040.00, the Shanghai index strengthened by 10.95 points or 0.26 percent to 4,150.54, the Hang Seng index strengthened by 286.22 points or 1.13 percent to 27,068.19, and the Strait Times index weakened by 25.19 points or 0.97 percent to 4,897.89.

Read: IDX to Discuss Index Rebalancing with MSCI

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