Jakarta. FTSE Russell has become the latest global index provider to delay its assessment of Indonesia’s stock market, postponing the country’s March 2026 index review amid uncertainty over free-float calculations and the risk of trading disruptions during ongoing capital market reforms.

The decision follows a similar move by MSCI, which earlier froze the rebalancing of Indonesian stocks until its next evaluation deadline, no later than May 2026. MSCI cited investor concerns over share ownership transparency and investability criteria.

The Jakarta Composite Index (JCI) opened slightly lower on Tuesday, slipping 0.29 points to 8,031 early in the session following FTSE Russell’s announcement. By contrast, MSCI’s freeze on rebalancing Indonesian stocks triggered heavy market volatility on Jan. 28.

Interim IDX president director Jeffrey Hendrik said FTSE Russell has expressed support for the reform action plan being implemented by the exchange, the OJK and self-regulatory organizations.

“They emphasized that implementation should follow the timeline that has already been communicated,” Jeffrey told reporters on Tuesday.

He added that FTSE Russell did not raise concerns over Indonesia’s country classification and that the exchange welcomed the firm’s support.

In its Feb. 9 announcement, FTSE Russell said the OJK held a press conference on Jan. 29 outlining its commitment to improving the integrity and transparency of Indonesia’s capital market, followed by the publication of the IDX’s reform plan on Feb. 5.

“In response to feedback from the FTSE Russell External Advisory Committee, and considering the potential for detrimental turnover and uncertainty in determining accurate free-float percentages for Indonesian securities amid the ongoing reform plan, FTSE Russell will delay Indonesia’s March 2026 index review,” the firm said.

FTSE Russell said it will continue monitoring developments and provide updates ahead of the June 2026 FTSE Global Equity Index Series quarterly review, scheduled for May 22, 2026.

Index Changes Frozen

As part of the decision, FTSE Russell has frozen all index changes for Indonesian securities in the near term. This includes suspending additions from initial public offerings, removals from periodic index reviews, reclassification between large-, mid- and small-cap segments, and weight adjustments linked to changes in shares outstanding, including rights issues assumed not to occur in index calculations.

However, the index provider will continue to process mandatory and fundamental corporate actions, such as removals due to mergers, prolonged trading suspensions, bankruptcy or delisting. Non-capital-increasing actions — including stock splits, reverse splits, bonus shares, mandatory spin-offs and dividend distributions — will also continue to be reflected.

Hendra Wardana, founder of Republik Investor and a capital market analyst, said the delay reflects unresolved technical issues in the reform process, particularly around minimum free-float requirements and potential disruptions to market mechanisms during the transition.

“For global index providers, regulatory certainty and market stability are key prerequisites before adjusting index composition,” Hendra said. “This delay is technical in nature and does not reflect concerns about Indonesia’s market fundamentals.”

He added that freezing index changes could stabilize foreign passive fund flows by keeping index composition unchanged, but would also delay potential inflows into stocks previously expected to be added to the index. This could encourage defensive investor positioning and heighten sentiment-driven volatility.

As part of its reform agenda, the IDX plans to propose broader share ownership disclosure requirements. Currently, only shareholders with stakes above 5% are required to report their holdings. The exchange intends to lower the threshold to 1% to improve transparency and market integrity.

Jeffrey said the proposed change aligns with international best practices. “India has already implemented a 1% disclosure requirement, and its market structure and investor base are relatively comparable to Indonesia’s,” he said.

The IDX also plans to raise the minimum free-float requirement for listed companies from 7.5% to 15%, a move aimed at ensuring sufficient shares are available for public trading. The transition is expected to take place over the next two to three years and will affect 267 listed companies.

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