Indonesia's recent market reforms may prevent a downgrade to frontier-market status by MSCI, though analysts warn the measures fall short of avoiding reduced weighting in global indexes. The changes, including naming companies with excessive ownership concentration, come after MSCI threatened action if Indonesia fails to address shareholding structures and trading irregularities.

Citigroup and Alphagate Capital predict some stocks will be culled from MSCI indexes in May due to insufficient public float. Henry Wibowo of Alphagate Capital expects Indonesia to remain in the emerging-market category but anticipates weight reductions as certain companies face exclusion during the rebalancing. The Indonesia Stock Exchange recently identified nine companies with over 95% shareholding concentration, including PT Barito Renewables Energy and PT Dian Swastatika Sentosa, whose stocks plunged as much as 14% following the disclosure.

PT Solusi Tunas Pratama announced plans to delist as it struggles to meet new free-float thresholds. The stock exchange also mandated that listed companies increase publicly traded shares to 15% over three years. While Citigroup strategist Ferry Wong calls the reforms positive for the medium to long term, he notes the May 2026 MSCI review may still result in selective exclusions or weight reductions for stocks with high concentration levels, effectively lowering their free float.