MSCI Removes GOTO and Downgrades CPIN, Mirae Asset Sekuritas Estimates Potential Outflows of Up to Rp1 Trillion

PT Mirae Asset Sekuritas Indonesia assesses that the results of the MSCI August 2026 Index Review put pressure on the Indonesian stock market, following MSCI’s removal of GOTO from the MSCI Indonesia Investable Market Index and the downgrade of CPIN from the Global Standard Index to the Global Small Cap Index. These changes could trigger technical outflows, although the impact on the IDX Composite (IHSG) is expected to be relatively limited and more concentrated in the directly affected stocks.

Head of Research & Chief Economist of PT Mirae Asset Sekuritas Indonesia, Rully Arya Wisnubroto, said the latest MSCI review was relatively more negative for the Indonesian market. In addition to the changes involving GOTO and CPIN, the absence of any Indonesian stocks being added to the Global Standard Index means there will be no inflows to offset the potential outflows.

“MSCI’s August 2026 Index Review delivered a more negative outcome for the Indonesian market. As we expected, CPIN was downgraded from the Global Standard to the Small Cap Index, while the risk involving GOTO materialized with its removal from the MSCI Indonesia Investable Market Index,” Rully said.

According to Rully, MSCI’s decision to remove GOTO was related to the stock’s low liquidity after remaining at the minimum price of Rp50 since May. This condition was considered to pose a risk to passive investors’ ability to replicate the index.

“MSCI specifically cited low liquidity resulting from GOTO remaining at the minimum price of Rp50 since May as the cause of potential index replicability issues,” Rully said.

Rully believes the primary impact of these changes will be technical, particularly through potential passive outflows ahead of the implementation of the index changes at the end of August. However, the pressure is not expected to have a significant immediate impact on the IHSG as a whole, as the outflows will be more concentrated in stocks undergoing index changes.

“The primary impact is technical, with potential passive outflows ahead of the implementation at the end of August. The absence of Indonesian stocks being added to the Standard Index also means there will be no offsetting inflows, in line with the restrictions imposed by MSCI that remain in place,” Rully said.

Meanwhile, Research Analyst at PT Mirae Asset Sekuritas Indonesia, Wilbert Arifin, said the magnitude of the change in Indonesia’s weighting in global indices is one reason why the impact of this review is expected to remain limited on the overall market.

According to Wilbert, Indonesia’s weighting in the Emerging Market Index is estimated to decline only from around 0.49% to 0.46%. In terms of outflows, he estimates passive outflows of approximately Rp500 billion to Rp1 trillion on the effective rebalancing date, following the close of trading on August 31.

“In the short term, there may be some impact on sentiment, as there are no additions and only reductions. However, the overall market impact is expected to be minimal and more concentrated in directly affected stocks, such as CPIN,” Wilbert said.

Ahead of the next MSCI review in November, Wilbert believes Indonesia needs to maintain market credibility and communication between regulators and MSCI. According to him, gradual improvements in these areas could pave the way for a more positive MSCI decision and serve as an additional catalyst for foreign capital inflows as well as the broader market.