MSCI said in its 2026 Market Classification Review released on June 23 that Indonesia will remain in the Emerging Markets category while it continues to assess market-accessibility concerns and the implementation of recently announced reforms. It set a further checkpoint for the November 2026 MSCI Index Review.
MSCI said international institutional investors have continued to report two main problems in Indonesia: limited transparency in shareholding structures, which makes free float difficult to determine reliably, and signs of coordinated trading behavior, which it said can reduce the reliability of observed prices for price discovery, portfolio construction and index replication. MSCI linked those issues to its Information Flow and Market Infrastructure criteria.
It noted reform measures announced by OJK, IDX and KSEI, including enhanced disclosure of shareholders with stakes above 1%, more detailed investor classification, a framework to monitor high shareholding concentration and a roadmap to raise the minimum free-float requirement to 15%. MSCI said investors need to see consistent implementation and sustained market-wide effects, and that if sufficient progress is not evident by November, it will consider options including launching a consultation on reclassifying Indonesia from Emerging Markets to Frontier Markets.
In the same review, MSCI kept South Korea in Emerging Markets and did not advance it toward developed-market status, citing unresolved accessibility issues including the won not being deliverable offshore and insufficient onshore foreign-exchange liquidity during extended trading hours for execution at developed-market standards. MSCI also cited limited adoption of omnibus accounts and in-kind transfers, operational burdens linked to the reinstated short-selling compliance regime, and early pre-settlement funding requirements. It said reclassification consultations require all key issues to be addressed, reforms to be fully implemented and market participants to have enough time to assess whether the changes are durable in practice.