The Indonesia Stock Exchange (IDX) plans to remove stocks designated under its High Shareholding Concentration (HSC) framework from the Jakarta Composite Index, while keeping them tradable, as MSCI reviews the country's market classification.
IDX President Director Jeffrey Hendrik said HSC stocks accounted for about 18% of the index's weighting as of Oct. 19. Their prices would no longer affect the benchmark under the plan, though the shares would remain listed and available for trading. Hendrik said the change is intended to give investors a more representative gauge of market movements.
IDX also plans to mark affiliations in its existing disclosures for shareholders with holdings above 1%. The exchange already publishes ownership data at that threshold. Hendrik said IDX would announce when both measures take effect; no start date has been announced.
IDX's framework identifies stocks whose ownership is concentrated among a small group of shareholders. In July, the exchange added a test comparing price movements with trading activity to its assessment. The framework is part of broader capital market transparency reforms by Indonesian authorities.
The review follows MSCI's proposal to reclassify its Indonesia indexes from emerging-market to standalone-market status. MSCI said market participants had pointed to ownership that was difficult to assess, suspected coordinated trading and limited evidence that rules were being enforced effectively. The proposed reclassification remains under consultation, and MSCI has kept a freeze on certain additions and increases for Indonesian securities.
Indonesia's authorities have also introduced ownership disclosures and a roadmap toward a 15% minimum free float. MSCI said investors want consistent implementation and evidence that the reforms have had a lasting effect.
MSCI will accept feedback through April 30, 2027, and said it plans to announce a decision on or before June 30, 2027. It also said it would continue removing securities identified under Indonesia's concentration framework from its own indexes.
