Indonesia has expelled tightly held companies from its Jakarta stock index in a move designed to prevent a MSCI downgrade. Global index provider MSCI has repeatedly raised concerns over the investability of south-east Asia's largest economy. The changes follow pressure from international investors who argue that certain constituents lack the liquidity and free float necessary for inclusion in major global benchmarks.
By tightening eligibility criteria, Jakarta aims to maintain its status as an investable market and avoid potential capital outflows. The index restructuring reflects a broader trend in the region as emerging markets strive to meet global standards. This shift could reshape foreign portfolio allocations into Indonesian equities in the near term.
Source: Financial Times Markets · Summarized by HeadlinesBriefing