S&P Dow Jones Indices has placed Indonesia on a watchlist for a potential downgrade to frontier status, to be reviewed in 2027. The move follows MSCI’s earlier warning about opaque shareholdings that sparked a wave of outflows.

Since MSCI flagged concentrated ownership, the Jakarta Composite index has slid 31% year‑to‑date, with a 1% drop on Wednesday. Jakarta has doubled the minimum free float to 15% and tightened disclosure to stakes above 1%.

The downgrade threat has weighed on the rupiah, which has shed 8% against the dollar, and amplified concerns over President Prabowo Subianto’s state‑control agenda.

If transparency issues persist, S&P may impose special treatment on Indonesian securities a year before the next review, jeopardizing the market’s emerging‑market classification.