Speaking to ministers on Oct. 21, Prabowo said Indonesia would not be deterred by MSCI’s proposal and characterized the review as an effort to frighten the country.
The IDX Composite closed at 5,863.78 on Oct. 15 and 4,996.61 on Oct. 19, a 14.79% drop calculated from Yahoo Finance’s daily closing data. It recovered to 5,328.36 at the Oct. 21 Jakarta close.
MSCI opened its review of Indonesia’s index status on Oct. 15, proposing to move the MSCI Indonesia Indexes from emerging-market to standalone status. The provider has made no decision. A reclassification would also change applicable global and regional composite benchmarks.
At an Oct. 21 Cabinet meeting, Prabowo said MSCI was trying to scare Indonesia and insisted the country would not back down. MSCI has described its action as a consultation on market classification.
MSCI says it wants evidence that reforms and enforcement are improving conditions throughout the Indonesian market. Among its concerns are unclear ownership structures and suspected coordination in trading. Indonesian authorities have announced measures covering disclosure of holdings above 1%, reports on concentrated shareholdings and a roadmap toward a 15% minimum free float.
The Indonesia Financial Services Authority (OJK) said Oct. 16 that it respected MSCI’s independence and would continue reforms and enforcement. OJK Chief Executive of Capital Markets, Financial Derivatives, and Carbon Exchange Supervision Hasan Fawzi said the agency was committed to enforcing market rules to protect integrity.
The proposed destination differs from the frontier-market status MSCI raised as a possibility in its June review. MSCI’s consultation document shows Indonesia’s weight in the MSCI Emerging Markets Index fell from 1.16% on Dec. 31, 2025, to 0.43% on Sept. 30, 2026, before the latest proposal.
MSCI has kept its restrictions on certain index changes that would favor Indonesian securities. Comments are due April 30, 2027, and MSCI plans to decide by June 30. It has set no date for implementing a reclassification.
