Global investors purchased Indonesian equities at the highest level in four months, with net inflows reaching $203.5 million on Tuesday. The surge came after regulators implemented new measures to improve market transparency, reversing outflows that followed MSCI's warning about a potential downgrade from emerging to frontier-market status.

Indonesia's decision to lower the disclosure threshold to 1% represents a critical response to MSCI's concerns about ownership transparency. The move aims to increase visibility into share ownership, providing clearer data on free float that could help maintain the country's market classification and attract continued foreign investment.

Citigroup analyst Ferry Wong described the regulatory changes as "a decisive step in addressing MSCI's core concerns around transparency and investability." The implementation of ultimate beneficial ownership disclosure above the 1% threshold now provides greater clarity on true free float, reducing uncertainty around liquidity for Indonesian stocks.