MSCI Removes 19 Indonesian Companies

Why this is here: The Jakarta Composite Index fell as much as 3.76% shortly after the MSCI announcement, making Indonesia one of Asia’s worst-performing equity markets in 2026 with annual losses reaching 25.17%.

Morgan Stanley Capital International removed 19 Indonesian companies from its global indices in May 2026, exposing weaknesses in Indonesia’s market. The removals—six from the Global Standard Index and thirteen from the Small Cap Index—followed concerns about corporate governance, ownership transparency, and liquidity. This triggered an estimated Rp31.5 trillion (US$1.8 billion) in foreign capital flight and put pressure on the Jakarta Composite Index and the rupiah.

MSCI’s decision stemmed from high shareholding concentration in several Indonesian companies. Barito Renewables Energy, for example, had 97.31% of its shares held by controlling shareholders, limiting public trading. The lack of new Indonesian companies added to the index highlights a disconnect between domestic growth and international investor expectations.

While some excluded companies, like Aneka Tambang and Chandra Asri Pacific, reported strong earnings, their limited liquidity made them unsuitable for index inclusion. Indonesia’s Financial Services Authority is now considering raising the minimum public free float threshold to 15% and lowering disclosure thresholds to 1%. These reforms aim to rebuild investor confidence and attract more durable foreign investment.