More Than Just Index Inclusion, Mirae Asset Sekuritas Highlights the Direction of MSCI’s Decision

PT Mirae Asset Sekuritas Indonesia assesses that investor attention ahead of the MSCI review results announcement on August 12, 2026, will not only be focused on potential changes to index constituents, but also on the direction of MSCI’s policies regarding the accessibility and investability of the Indonesian stock market.

Head of Research & Chief Economist of PT Mirae Asset Sekuritas Indonesia, Rully Arya Wisnubroto, said investors should pay close attention to whether MSCI begins signaling an easing of the special treatment or freeze currently applied to Indonesian stocks.

“Investors should not only look at index inclusion or exclusion, but, more importantly, closely monitor the direction of MSCI’s policies regarding Indonesia’s investability and market accessibility,” Rully said.

According to Rully, one key factor to watch is whether MSCI begins to ease the freeze on increases in the Foreign Inclusion Factor (FIF) and Number of Shares (NOS), while opening opportunities for additional Indonesian stocks to be included in, or migrated to, investable indices.

In addition, investors should monitor MSCI’s views on transparency, free float, and disclosure of share ownership structures. According to Rully, these issues have longer-term implications as they relate to global investors’ ability to assess free float and determine fair stock prices.

“Indonesia’s issue is no longer simply about index rebalancing, but whether global investors can accurately assess free float and determine fair prices,” Rully said.

Rully believes that MSCI’s decision this time will also be important in providing an indication of the timeline for normalizing its treatment of Indonesia. If MSCI considers the reforms undertaken by the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) to be increasingly credible, the impact could be more positive for the market than merely changes to several index constituents. Conversely, an extension of the special treatment without a clear roadmap could lead investors to continue applying a higher risk premium to Indonesian assets.

Meanwhile, Research Analyst at PT Mirae Asset Sekuritas Indonesia, Wilbert Arifin, said Indonesia’s economic fundamentals remain sufficiently strong to support the market. Economic growth in the second quarter of 2026 reached 5.29% YoY, exceeding the market expectation of 5.1%, while corporate earnings also continued to show growth in the first half of 2026.

However, he noted that the market’s focus going forward will shift toward Indonesia’s ability to maintain this momentum amid emerging signs of a slowdown and the impact of higher interest rates on credit growth.

“The factor that will drive the market is how much of this momentum can be sustained, given that signs of weakening have begun to emerge toward the end of the first half of 2026, coupled with higher interest rates that could put pressure on business credit,” Wilbert said.

He added that external and fiscal balance conditions will also remain important factors, as they will influence perceptions of Indonesia’s credit rating. If these fundamentals remain intact, investor attention will increasingly turn to MSCI’s decision ahead of November, which, if it delivers a positive signal, could potentially mark a turning point for foreign capital inflows into the Indonesian market.