MSCI Considers Reclassifying Indonesia to Standalone Market Status

Indonesia faces a potential downgrade from emerging-market status as MSCI Inc. consults on a proposal to reclassify the country as a standalone market due to market integrity concerns.

MSCI cited ongoing worries regarding market dysfunction, suspected coordinated trading behavior, and a lack of meaningful enforcement despite recent reforms announced by local authorities.

The proposed reclassification threatens foreign investor demand and follows a 32% decline in Indonesia's benchmark stock index in 2026, making it the worst performer among global peers.