Move follows MSCI’s freeze as Jakarta races to tighten disclosure norms and raise free-float thresholds to avert potential downgrade
FTSE Russell has deferred its March 2026 index review for Indonesia and imposed a freeze on most index changes, citing uncertainty over free-float data and broader market integrity issues—a move that heightens pressure on Southeast Asia’s largest equity market.
In a notice issued on Monday, the global index provider said it was invoking its “Exceptional Market Disruption” rules following consultations with its advisory committees and amid difficulty in determining accurate free-float levels for Indonesian securities. An update is expected before its next major global review in May, while a separate country classification announcement remains scheduled for April.
Indonesia retains its status as a Secondary Emerging Market. However, with immediate effect, FTSE Russell has suspended most index-related corporate events for domestically listed Indonesian stocks. Newly listed shares will not be added to FTSE indices, and routine changes arising from index reviews—including additions, deletions, size reclassifications and updates to shares in issue or investability weights—will not be implemented.
Deletions resulting from takeovers, mergers, bankruptcies or delistings will continue, as will stock splits, bonus issues and dividend distributions, the notice said.
The decision mirrors a recent move by MSCI, which warned that Indonesia could face a downgrade from emerging to frontier market status, citing concerns over ownership transparency and trading practices. MSCI has also frozen updates to Indonesian securities in its indices.
The twin actions by the world’s two largest index providers have unsettled investors. Around $120 billion has been erased from the benchmark Jakarta Composite Index since MSCI first flagged its concerns last month. Although Indonesian equities and the rupiah edged higher in early trade on Tuesday, market participants said FTSE’s decision had been largely anticipated.
Reform efforts gather momentum
Indonesian authorities have moved swiftly to contain the fallout. On January 29, the Financial Services Authority (OJK) pledged measures to strengthen capital market integrity and transparency. Shortly thereafter, the Indonesia Stock Exchange (IDX) outlined reforms aimed at raising minimum free-float requirements and tightening disclosure norms for major shareholders to improve visibility into ownership structures and trading activity.
FTSE Russell said it had taken into account the ongoing reform process and the uncertainty surrounding free-float calculations during the transition period.
The IDX said it met FTSE officials on Monday and was told the index provider supports the recently announced reforms. Exchange executives and financial regulators are also scheduled to brief MSCI this week on progress made.
The market volatility has already had institutional repercussions, with five senior officials at the stock exchange and regulator stepping down following the recent sell-off.
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