The Indonesian stock market is once again under pressure after two global index providers, MSCI and FTSE Russell, implemented policies considered to send negative signals regarding the quality and liquidity of several domestic stocks.

The decisions not only triggered a decline in the Composite Stock Price Index (IHSG), but also raised concerns over the decreasing attractiveness of Indonesia’s capital market in the eyes of global investors.

Several Indonesian stocks removed from global indexes

In the May 2026 periodic index review, MSCI removed six Indonesian stocks from the MSCI Global Standard Indexes.

The six companies excluded were PT Amman Mineral Internasional Tbk (AMMN), PT Barito Renewables Energy Tbk (BREN), PT Chandra Asri Pacific Tbk (TPIA), PT Dian Swastatika Sentosa Tbk (DSSA), PT Petrindo Jaya Kreasi Tbk (CUAN), and PT Sumber Alfaria Trijaya Tbk (AMRT).

Meanwhile, AMRT was transferred to the MSCI Small Cap Indexes. MSCI also removed 13 additional Indonesian stocks from the MSCI Small Cap Indexes, including ANTM, AALI, BSDE, SIDO, and MIKA.

Market pressure intensified after FTSE Russell announced plans to remove stocks categorized as having High Shareholding Concentration (HSC) from its indexes.

FTSE even opened the possibility of assigning a price-to-zero valuation to stocks with excessively concentrated ownership structures.

The move is considered a serious warning for Indonesia’s capital market because it relates to liquidity issues and trading accessibility for global investors, particularly passive index-based fund managers.

IHSG plunged as foreign investors intensified selling

The announcement immediately pressured the market. During trading on Wednesday (13/5/2026), the IHSG closed down 1.98 percent at 6,723.32.

Several stocks removed from the MSCI index experienced sharp declines. TPIA plunged 14.85 percent, BREN fell 11.36 percent, DSSA weakened 11.16 percent, and CUAN dropped 10.05 percent.

Foreign investors were also recorded posting net sell transactions amounting to Rp1.53 trillion across the market. On a year-to-date (ytd) basis, total foreign net sell has reached Rp40.25 trillion.

Capital market observer and Founder of Republik Investor, Hendra Wardana, stated that the impact of this MSCI rebalancing remains significant on foreign capital flows, even though some market participants had anticipated the decision several weeks earlier.

According to him, stocks removed from the global indexes still have the potential to experience high short-term volatility due to foreign selling pressure and portfolio adjustments by global institutions.

“On the other hand, defensive and domestically oriented stocks are relatively more favorable because they are considered more resilient to external pressures,” Hendra said.

Director of Research and Investment Association at Pilarmas Investindo Sekuritas, Maximilianus Nicodemus, assessed that the reduction in the number of Indonesian stocks within the MSCI index could lower the potential for capital inflows into the domestic market.

This is because global indexes such as MSCI have long served as one of the main references for international investors in determining investment allocations in emerging markets.

BEI says market uncertainty has started to ease

Amid ongoing market pressure, the Indonesia Stock Exchange (BEI) actually sees the MSCI announcement as bringing a positive side by reducing uncertainty that had previously overshadowed the market.

Acting President Director of BEI, Jeffrey Hendrik, said market participants had previously adopted a wait-and-see approach while awaiting MSCI’s decision.

According to Jeffrey, after the rebalancing results were announced, at least one source of market uncertainty had been reduced.

“With what MSCI announced today, one element of uncertainty in the market has decreased,” Jeffrey stated during a press conference at the Indonesia Stock Exchange building in Jakarta.

Jeffrey remains optimistic that the domestic stock market still has room to recover if global uncertainty begins to ease and is supported by collaboration among regulators, issuers, and market participants.

Regulators urged to improve market transparency

On the other hand, regulators are considered to need further reforms to restore global investor confidence in Indonesia’s stock market.

Capital market observer from the University of Indonesia, Budi Frensidy, assessed that regulatory reforms implemented so far have tended to be reactive.

According to him, issues related to effective free float, beneficial ownership transparency, and concentrated share ownership should have been addressed before becoming concerns raised by MSCI and FTSE Russell.

Meanwhile, several analysts believe the current situation could serve as a moment of evaluation for investors, as well as an opportunity to accumulate fundamentally strong stocks that have undergone deep corrections.

Capital market observer and Co-Founder of PasarDana, Hans Kwee, estimates that the IHSG still has the potential to move toward the 7,600–7,800 range by the end of 2026, provided that global geopolitical tensions begin to ease and the pressure from index rebalancing subsides.