The decision by Morgan Stanley Capital International (MSCI) on Indonesia’s capital market prompted a response from the Chief Investment Officer of Indonesia’s Investment Management Agency (BPI), Danantara, Pandu Patria Sjahrir, who stressed the need for internal improvements (30/01).

Danantara CIO Calls MSCI Assessment a Wake-Up Call

Pandu said the MSCI decision should be seen as constructive feedback rather than a reason to be defensive. He stated that the assessment serves as a reminder for the market to improve.

“I have spoken about MSCI providing that input, yes, it is a wake-up call, and also like taking a cold shower. Sometimes we need it, and we do not need to be defensive. We should just improve ourselves because our market is fundamentally very good,” Pandu said in Jakarta on Friday (30/01).

He added that the issues highlighted by MSCI have been known for several months and should encourage all stakeholders to act.

“I am optimistic. Hopefully, this will move everyone, because this MSCI issue has been going on for 3.5 months, four months, everyone already knows, so just fix it,” he said.

Focus on Market Improvement Amid Volatility

When asked about Danantara’s role during stock market volatility, Pandu said the institution has invested in the market. He emphasized that regulators should prioritize improving market quality.

“Better, like this, from the OJK side, all regulators should focus on how we make our capital market better,” he said.

MSCI Highlights Transparency and Ownership Structure Concerns

In its announcement, MSCI stated that global investors continue to raise concerns about the lack of transparency in Indonesia’s share ownership structure. This remains an issue despite minor data improvements from the Indonesia Stock Exchange (BEI).

MSCI also pointed to concerns over shareholder categorization and the potential for coordinated trading, which may affect the investability of Indonesia’s stock market.

MSCI Freezes Index Adjustments Pending Review

As an interim measure, effective immediately, MSCI froze all increases to the Free Float-adjusted Investable Factor (FIF) and the number of Indonesian shares. MSCI also confirmed that no Indonesian stocks would be added to the MSCI IMI and that there would be no upgrades in stock size classification.

MSCI said it will review Indonesia’s market accessibility and classification again in May 2026 if there is no significant improvement in share ownership transparency.

PHOTO: KONTAN.CO.ID

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