S&P pushes ahead with Indonesia stock review as rivals hit pause
Competitors MSCI and FTSE Russell step up their scrutiny of the country’s market amid concerns of overstated free float
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[SINGAPORE] S&P Dow Jones Indices (DJI) said that it is monitoring the developments over stock ownership transparency in Indonesia. It will press ahead with its March quarterly rebalance, even as its rival index providers have paused their reviews.
The S&P DJI said that it is monitoring recent developments, including the new Indonesia Stock Exchange guidelines. It added that its March 2026 rebalance will proceed based on “standard procedures”, under its existing methodology.
The decision sets the S&P apart from MSCI and FTSE Russell, which have stepped up their scrutiny of Indonesia’s market, amid concerns that tightly-held stakes and opaque ownership arrangements may be overstating the free float.
The free float is the number of shares available for trading.
Regulators have been under pressure to restore market credibility, particularly after MSCI in January warned that Indonesia could risk reclassification to frontier-market status, with investor sentiment also weighed by sovereign downgrade concerns.
Nirgunan Tiruchelvam, an analyst at Aletheia Capital, said: “S&P Dow’s move signals that the Indonesian authorities are probably making progress in managing index providers’ demands.
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“The hope is that they will continue to address concerns around opaque ownership structures and the free float quickly.”
FTSE Russell said on Feb 9 that it would postpone its March index review for Indonesia, citing the risks of adverse turnover and uncertainty over the public float, and that it will reassess the situation in June.
The move followed MSCI’s warning over investability and accessibility concerns – which it will assess by May – that at one point sparked the biggest sell-off in South-east Asia’s largest market in about three decades.
Since January’s market rout, Indonesian regulators have pledged reforms to boost transparency and liquidity.
This includes doubling the minimum free-float requirement to 15 per cent, and tightening disclosure standards. The country has also undergone leadership changes at its exchange and regulatory bodies. BLOOMBERG
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