The Financial Services Authority of Indonesia (OJK) is closely monitoring market movements following the MSCI Index Review Rebalancing announced by MSCI Inc. on 12 May 2026 (13/05).

MSCI Rebalancing Reflects Global Market Adjustments

OJK stated that the MSCI Index Review Rebalancing is part of a regular review mechanism conducted based on several parameters, including market capitalization, free float, liquidity, and stock price dynamics.

The authority emphasized that the rebalancing is not unique to Indonesia, but is also experienced by nearly all Asia-Pacific markets in this review cycle.

OJK noted that multiple countries experienced index composition changes. Japan saw 14 issuers removed, Taiwan 7 issuers removed, Malaysia 6 issuers removed, and South Korea 3 issuers removed. China also recorded both additions and removals, with 22 issuers added and 24 removed.

According to OJK, this reflects global portfolio allocation adjustments and broad market dynamics, rather than an Indonesia-specific issue.

OJK Emphasizes Market Reform and Strengthening of Capital Market Integrity

OJK stated that the situation is viewed as a momentum to strengthen the integrity and depth of Indonesia’s capital market.

Chairperson of the Board of Commissioners OJK, Friderica Widyasari Dewi, said that OJK, together with stakeholders, will continue to encourage improvements in market integrity, increase free float and liquidity, expand the investor base, and strengthen issuer governance.

She added that these efforts aim to enhance the competitiveness and sustainability of Indonesia’s capital market.

OJK also confirmed that coordination with Self-Regulatory Organizations (SROs) and stakeholders will continue to ensure that the capital market becomes more attractive, liquid, and investable in the long term.

Short-Term Market Impact Seen as Part of Reform Process

Head of the Executive Supervision of Capital Market, Financial Derivatives, and Carbon Exchange OJK, Hasan Fawzi, stated that the MSCI rebalancing outcome had been anticipated.

He said the exit of several Indonesian issuers from the MSCI index is a short-term consequence of ongoing capital market integrity reforms.

He stated that this will have short-term implications, including adjustments and declines in affected stock prices.

“This is a short-term pain, meaning we must face a level of decline in the short term as a consequence that has been calculated and anticipated from the beginning,” Hasan said.

He added that the rebalancing marks a momentum to form a new baseline for Indonesia’s capital market, improving the quality of listed companies on the Indonesia Stock Exchange and encouraging them to become preferred investment choices.

Indonesia Market Fundamentals Remain Resilient and Stable

OJK stated that Indonesia’s financial sector fundamentals remain resilient and stable, and that short-term volatility or global index changes do not alter the commitment to building a healthy, transparent, and credible capital market.

Hasan noted that Indonesia’s stock market remains competitive, reflected in the Jakarta Composite Index price-to-earnings ratio at around 16 times.

He also highlighted that listed companies recorded positive revenue and profit growth in the first quarter of 2026.

OJK added that it continues to coordinate closely with SROs in monitoring market developments and implementing necessary policy responses, including the extension of share buyback policies without requiring a General Meeting of Shareholders (RUPS).

The authority reaffirmed its commitment to accelerating reform initiatives to strengthen the credibility and investability of Indonesia’s capital market globally.

PHOTO: OJK

This article was created with AI assistance.

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