Antara News·Indonesia·Thursday, October 29, 2026 at 04:03 PM UTC

Indonesia's capital market exceeds standalone standards: OJK

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Imamatul Silfia, Resinta Sulistiyandari

The Financial Services Authority (OJK) said Indonesia's capital market conditions do not warrant classification as a standalone market, following MSCI's plan to downgrade the country's emerging market status.

Chairperson of the OJK Board of Commissioners, Friderica Widyasari Dewi, on Thursday stated that Indonesia has relatively strong economic fundamentals and capital market size compared to a number of countries in that category.

According to her, Indonesia is currently in the emerging market group along with countries such as Malaysia, South Korea, Turkey, and the Philippines.

In terms of economic growth, inflation, and market capitalization, Indonesia is considered still competitive, she added.

"Is Indonesia comparable to countries like Zimbabwe, countries like Ukraine that are at war, or Argentina, where inflation has reached over 33 percent? This is something we must reflect on," she pointed out.

Friderica explained that based on Morgan Stanley Capital International (MSCI)'s market accessibility review in June 2026, Indonesia had met 16 of the 18 indicators in the assessment.

She noted the achievement demonstrated Indonesia's capital market had met most parameters of concern to global index providers.

However, on October 15, 2026, MSCI announced a consultation regarding the proposed change in Indonesia's classification from an emerging market to a standalone market.

In its announcement, MSCI highlighted several issues, including transparency of share ownership structures, allegations of coordinated trading, and the need for evidence of consistent implementation and enforcement of regulations.

In response, Friderica said the OJK had introduced various reforms to address these concerns, including lowering the share ownership disclosure threshold from 5 percent to 1 percent, strengthening free float requirements, and introducing a list of highly concentrated shareholdings.

She acknowledged, however, that regulatory enforcement remained a key area of concern in assessments of Indonesia's capital market.

The OJK will continue to strengthen supervision and regulatory enforcement to enhance market integrity and maintain investor confidence, she added.

Friderica also noted that capital market reforms are not solely undertaken to meet the assessments of a single global index provider, but also to strengthen the long-term quality of the national capital market.

She expressed hope that the reforms would enhance the resilience, transparency, efficiency, and fairness of Indonesia's capital market, while strengthening its role as a long-term investment vehicle for the public.

The MSCI consultation process remains underway, with the index provider accepting feedback until April 30, 2027. A final decision on Indonesia's market classification is expected by June 30, 2027, at the latest.

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