Indonesia Stocks Crash Around 11% As MSCI Reviews Market Status, With Jakarta Composite Down 39% So Far In 2026

Indonesia’s Jakarta Stock Exchange Composite Index dropped 614 points or 10.6% to 5,240 on 16 October 2026, extending its year-to-date (YTD) fall to 39%. The decline came after Morgan Stanley Capital International (MSCI) proposed changing the country’s classification of indices from emerging market to a standalone market status.

MSCI said it would consult market participants and retain its existing freeze on Indonesian securities in its indices until further notice.

Indonesia’s 15% Free Float Plan Faces Scrutiny

The index aggregator said investors had raised concerns about the ability to invest in Indonesia’s equity market, including persistent opacity in shareholding structures and suspected coordinated trading.

Indonesian authorities have announced reforms covering disclosures for shareholders with stakes above 1%, more detailed investor classifications, high shareholding concentration (HSC) reporting and a roadmap for a minimum free float requirement of 15%.

However, MSCI said investors wanted consistent implementation and evidence that these measures were having a sustained effect.

MSCI Indonesia Reclassification Decision Due By June 2027

MSCI will announce its final decision by the end of June 2027 and could provide an interim update on market participant feedback during the consultation.

It expects to proceed with the proposed reclassification unless clear evidence of material improvements in market governance and functioning warrants reconsideration.

The index provider had indicated in June 2026 that insufficient progress by the November 2026 index review could lead to a consultation on changing Indonesia’s status. Market participants subsequently indicated that improvements had not been consistently demonstrated.

MSCI Keeps Indonesian Securities Under Index Freeze

MSCI said it would continue freezing certain index-related changes for Indonesian securities resulting from index reviews or corporate events until further notice.

Under this, it will not implement increases to foreign inclusion factors (FIF) or number of shares (NOS), additions to the MSCI Indonesia investable market index (IMI), and upward moves between index size segments.

MSCI will also continue removing securities identified by Indonesian authorities under the HSC framework and use disclosures on shareholders with stakes above 1% to adjust free-float estimates.

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