TEMPO.CO, Jakarta – Global index provider S&P Dow Jones Indices (S&P DJI) has placed Indonesia on its 2027 watchlist for market classification review, warning that unresolved concerns over stock ownership transparency could result in Indonesian equities receiving special treatment, including a possible reclassification from an emerging market to a frontier market.
Indonesia currently retains its emerging market status under S&P DJI's classification.
Transparency Concerns Under Review
In an announcement published on Wednesday, July 8, S&P DJI said it is continuing to monitor developments related to stock ownership transparency in Indonesia, as well as measures introduced by the Indonesia Stock Exchange (IDX) to address the issue.
"If the situation worsens, S&P DJI may consider applying special treatment to Indonesian securities," the index provider said.
Under S&P DJI's country classification methodology, if the underlying issues remain unresolved for one year after any special treatment is implemented, Indonesia's market classification could be reassessed in the subsequent annual review.
Indonesia is one of three countries currently on the S&P DJI watchlist, alongside Turkey and Nigeria.
Follows MSCI's Decision to Maintain Freeze
The latest development comes after global index provider Morgan Stanley Capital International (MSCI) decided to maintain restrictions on Indonesian equities in its August 2026 index review.
MSCI said it will continue to freeze all increases to Foreign Inclusion Factors (FIFs) and share counts, refrain from adding Indonesian stocks to the MSCI Investable Market Index (IMI), and maintain the suspension of upward migration across all market capitalization segments.
"Additionally, MSCI will continue to remove securities identified by Indonesian authorities as part of the High Stock Ownership Concentration (HSC) framework," the firm said in a statement issued on Tuesday, July 7.
MSCI also said it will continue using 1 percent shareholder disclosure data to adjust its estimates of companies' free float when necessary.
Emerging Market Status Remains Intact
The ongoing restrictions follow MSCI's June 2026 Market Classification Review, in which Indonesia retained its emerging market status despite persistent concerns over market accessibility and ownership concentration.
MSCI said it will continue evaluating the implementation of Indonesia's capital market reforms through November 2026, with the findings expected to inform future classification decisions.
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