Antara News·Indonesia·Friday, October 16, 2026 at 11:11 AM UTC

Airlangga urges concrete capital market reform after JCI halt

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Bayu Saputra, Yashinta Difa

Jakarta (ANTARA) - Indonesia's Coordinating Minister for Economic Affairs Airlangga Hartarto stressed that capital market reforms must demonstrate concrete progress to investors following a temporary trading halt on the Jakarta Composite Index (JCI) on Friday.

The composite index plunged 469.86 points, or 8.01 percent, to the 5,393.92 level on Friday morning, triggering an automatic circuit breaker to halt stock trading temporarily.

"This serves as a note for us moving forward: reforms must be implemented, and the progress must be visible—particularly to both domestic and international investors," Airlangga stated.

According to the minister, the index slump was largely driven by negative market sentiment following an unexpectedly early report from global index provider Morgan Stanley Capital International (MSCI) released Thursday (October 15).

In the report, MSCI launched a market consultation proposing to downgrade Indonesia’s stock market status from an "Emerging Market" to a "Standalone Market"—a move that could spark massive capital outflows.

"The MSCI announcement came sooner than expected. They had initially indicated November, but it arrived in October. However, they have set new targets for next year—specifically for April and June," Airlangga noted.

He explained that MSCI’s main concern centers on the execution of regulatory and reform promises made by domestic market authorities, which have yet to deliver clear, visible results compared to faster reform implementations in peer nations.

MSCI has set an April 30, 2027, deadline for its consultation process, with a final classification decision due before June 30, 2027.

The index provider cautioned that the downgrade will proceed unless there is clear evidence of material improvements in market governance and operations.

Concerns surrounding Indonesian equities have been escalating since January 2026, when MSCI froze certain changes to the index amid investor complaints regarding opaque share ownership structures and potential coordinated trading practices.

In response to the market turmoil, Airlangga announced an upcoming high-level coordination meeting between the government, the Financial System Stability Committee (KSSK), the Financial Services Authority (OJK), Bank Indonesia (BI), and the Indonesia Stock Exchange (IDX).

“Regarding other technical matters, we will certainly discuss these with the exchange, as we expect concrete steps along with a clear timeline,” Airlangga emphasized.

The OJK and IDX have previously outlined corrective initiatives, including stricter share ownership disclosure rules and a proposed roadmap to raise the minimum public float—the percentage of shares held by public investors—to 15 percent.

Urging calm amid the volatility, Airlangga appealed to market participants to differentiate between short-term sentiment and the underlying strength of Indonesia's broader economic fundamentals.

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