The Indonesia Stock Exchange (BEI) has continued its series of discussions with MSCI.

In these talks, BEI is focusing on addressing several concerns raised by the global index provider, particularly regarding improvements in transparency of share ownership within the domestic market.

BEI’s Director of Corporate Assessment, I Gede Nyoman Yetna, stated that the exchange will clarify the remaining issues highlighted by MSCI, as conveyed in an official statement on Thursday (April 23, 2026).

Nyoman explained that MSCI is currently assessing the implementation of reforms related to ownership transparency and market liquidity in Indonesia’s stock market. In addition, MSCI is seeking feedback from clients and market participants regarding the reforms introduced by Indonesian authorities.

On the other hand, he noted that recent improvements in transparency have begun to yield positive results, with investor confidence in the domestic capital market gradually strengthening.

He added that since the announcement of the market transparency reform on April 2, 2026, the IHSG has risen by around 8%, from 7,026 to a closing level of 7,559.

Previously, MSCI decided to delay its review of Indonesian stock constituents for the May 2026 rebalancing, despite the reforms already implemented by local authorities.

In its official statement, MSCI said it is still evaluating the consistency and effectiveness of the data and policies, including the new minimum free float threshold of 15%.

As a result of this delay, MSCI will not add Indonesian stocks to the MSCI Investable Market Indexes, nor will there be any increase in the foreign inclusion factor (FIF), adjustments to the number of shares, or index classification upgrades.

However, MSCI will proceed with removing stocks categorized as having high shareholding concentration (HSC) and will use 1% shareholder data to adjust free float calculations, although full implementation of this data will wait until the review is completed.

MSCI emphasized that it is still examining the scope, consistency, and effectiveness of the new data and policies introduced by Indonesian regulators.

Regarding potential capital outflows, analysts estimate that Indonesia’s weight in the MSCI Emerging Market index may decline following the risk of several conglomerate stocks being removed from the index.

Henry Wibowo, Co-Founder of Alphagate Capital and former Chief Indonesia Strategist at J.P. Morgan, explained that this reduction in weight could lead to significant foreign capital outflows from Indonesia’s equity market.

However, he noted that the market has already anticipated the possible removal of such concentrated ownership stocks.

According to Henry, the continued delay in the May rebalancing has largely been priced in and reflected in current market conditions.

He also highlighted the possibility of further downweighting for stocks with lower actual free float, following the adoption of newly disclosed 1% shareholder data.

Henry estimates Indonesia’s weight in the MSCI Emerging Market index could decline by 0.2%–0.3% from the current level of around 1%, with potential foreign outflows reaching between US$1.5 billion and US$3 billion, depending on the extent of weight reductions and stock removals.

Meanwhile, Harry Su, Managing Director of Samuel Sekuritas Indonesia, believes that stocks likely to be removed from MSCI will be limited to those with high ownership concentration (HSC).

He also projects a deeper decline in Indonesia’s weight in the global index, with two HSC stocks contributing roughly 5 basis points to the reduction.

He added that Indonesia’s weight in the MSCI Asia Emerging Index has already declined by 0.37% year-to-date.

In terms of capital flows, foreign outflows in March reached approximately Rp23.3 trillion (US$1.4 billion).

However, excluding large negotiated market transactions, the net selling figure is closer to Rp9 trillion (around US$530 million).

When combined with February’s outflows under the same basis, along with an additional Rp3.4 trillion outflow up to early April, this indicates that foreign investor sentiment remains weak.

Sufianti, Equity Strategist at Bloomberg Intelligence, noted that the selling pressure has been concentrated in LQ45 stocks, suggesting that foreign investors are reducing exposure through the most liquid equities.

On the positive side, this situation has made valuations more attractive, with IHSG and LQ45 multiples approaching their lowest levels after experiencing double-digit declines.