MSCI Freezes Indonesia Stock Index Rebalancing Amid Market Concerns

January 28, 2026 | 11:44 am

TEMPO.CO, Jakarta - Morgan Stanley Capital International (MSCI) has temporarily suspended the rebalancing of Indonesian stock composition and weights. The decision stems from MSCI's assessment of the free float of Indonesian stocks.

In a formal statement, MSCI stated that the freeze was a result of investor concerns regarding the transparency of stock ownership structures. While some global players support the use of PT Kustodian Sentral Efek Indonesia's (KSEI) Monthly Ownership Composition Report as an additional reference, many investors have expressed concerns about how KSEI categorizes its stockholders.

"While there have been minor enhancements to PT Bursa Efek Indonesia's (IDX) float data feed, investors highlighted that fundamental investability issues persist due to ongoing opacity in shareholding structures and concerns about possible coordinated trading behaviour that undermines proper price formation," MSCI stated in its announcement on Wednesday, January 28, 2026.

To address these concerns, MSCI emphasized the need for more detailed and reliable information on stock ownership structures, including monitoring high ownership concentration, to support assessments of free float and investment capability across all Indonesian stocks. Consequently, MSCI took freezing action on stock adjustments.

With the freeze, MSCI has halted all increases in Foreign Inclusion Factors (FIF) and Number of Shares (NOS); it will not apply index additions to the MSCI Investable Market Indexes (IMI); and it will not implement upward migrations across segments, including from Small Cap to Standard Index.

MSCI stated that it will review the accessibility status of the Indonesian market if significant progress in transparency is not achieved by May 2026. If this occurs, it could result in a reduction of weight in the MSCI Emerging Markets index for all Indonesian stocks and the potential reclassification of Indonesia from an Emerging Market to a Frontier Market. "MSCI will continue to monitor developments in the Indonesian market and engage with market participants and authorities, including the Otoritas Jasa Keuangan (OJK) and IDX. MSCI will communicate further actions as warranted," MSCI stated.

Read: HSBC's 2026 Outlook: Indonesia's Stock Market Strengthens as Rupiah Weakens

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