MSCI Notes Remind Indonesia to Accelerate Capital Market Reforms

Indonesia's capital market reforms are under renewed focus following a review by global index provider MSCI. Coordinating Minister for Economic Affairs Airlangga Hartarto acknowledged the MSCI report, stating it serves as a crucial reminder to accelerate necessary changes within the sector.

While MSCI retained Indonesia in the emerging market category in its 2026 Global Market Accessibility Review, the agency downgraded its assessment of the country's information flow from positive to negative. However, MSCI noted that Indonesia's market access, size, and liquidity remain adequate, with no issues regarding foreign ownership restrictions this year.

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MSCI's notes actually confirm that Indonesia's economic fundamentals and market access remain strong. The concern is about market transparency and integrity, and this is where the government, along with OJK and IDX, has been and continues to implement concrete reforms.

Hartarto emphasized that the MSCI findings align with the government's ongoing reform agenda. These reforms include strengthening free float requirements, enhancing the transparency of ultimate beneficial owners, disclosing shareholders with over one percent ownership, and deepening the capital market. The government remains optimistic about Indonesia's position as an emerging market and is committed to these reforms to sustain global investor confidence.

Officials from the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) have indicated that MSCI's feedback will be valuable for bolstering the integrity, transparency, and competitiveness of Indonesia's capital market. Analysts view the MSCI decision as positive, alleviating concerns about a potential downgrade to a frontier market, and see the focus on transparency as an opportunity to improve governance and market appeal.

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We are optimistic that Indonesia remains on the emerging market track, and the government is committed to completing this reform agenda to maintain investor trust.