MSCI downgraded Indonesia’s Information Flow criterion to negative in its 2026 Global Market Accessibility Review.
The June 18 report cited transparency issues regarding free-float shares and coordinated trading activity. These factors potentially distort price formation and hinder international investors from accurately assessing companies.
The adjustment arrived days before MSCI’s annual market classification review on June 23. Indonesia now faces a potential downgrade from emerging market to frontier market status.
This reclassification could trigger substantial capital outflows from funds tracking MSCI emerging market indexes. Indonesian equities currently rank among the world’s worst-performing major markets this year.