MSCI Inc. will keep its current methodology on Indonesian equities while promising a status update in June. The index provider is examining recent regulator‑driven reforms, focusing on free‑float calculations and the reliability of new data feeds. Investors have been watching closely after MSCI warned that the market could slip to frontier status.

The warning sparked a sharp sell‑off, prompting resignations of senior market officials and a wave of policy changes aimed at widening public float. Analysts note that limited tradable shares have long hampered foreign participation, and MSCI’s review of scope and consistency could determine whether the Jakarta Composite Index regains credibility.

Market sentiment remains fragile. The index’s downgrade threat contributed to the Jakarta Composite becoming the worst‑performing major gauge this year, compounded by concerns over regional policy direction and the fallout from the Iran conflict. Capital flows have stalled as fund managers await clarity on MSCI’s final assessment.

Should MSCI’s June update confirm that reforms improve investability, the benchmark could see renewed inflows and a lift in Indonesia’s market perception. Conversely, a negative verdict may cement the outflow trend, keeping the country's equities on the periphery of global portfolios.