Challenging MSCI by Improving Ourselves

INDONESIA has the authority to regulate its own capital market. However, decisions made by foreign index providers can shake confidence in that market.

Here lies the paradox: the rules are in the hands of the state, while trust crosses sovereignty boundaries.

When MSCI questions the viability of the Indonesian stock market, is the wisest response to harden our objections or strengthen our evidence?

This question arises after MSCI opened consultation on the proposal to change Indonesia's classification from an emerging market to a standalone market. The announcement on October 15, 2026, is not yet a final decision.

The consultation will run until April 30, 2027, with a final decision expected by June 30, 2027.

There is still room to improve the situation, even though uncertainty has become a burden.

A response that questions, objects, and regrets can be understood.

Investor interests, market reputation, and business financing are at stake.

However, wise responses must ensure that efforts to defend Indonesia yield improvements that investors can feel.

Sovereignty and Trust

MSCI is not a world government. It is a commercial company that provides indices and investment information services.

However, its indices are used as benchmarks by fund managers. Its influence grows as market players use its products in investment decisions.

When a market is removed from a benchmark index, some passive funds may have to adjust their portfolios.

Sales can occur due to investment mandates, even when several companies in that country still have good prospects.

This risk is what market players fear following Indonesia's proposed reclassification.

The next paradox arises: healthy companies can suffer from the overall weakness of market governance.