Jakarta. The Indonesia Stock Exchange (IDX) says the removal of several companies from major global indexes such as MSCI and FTSE Russell reflects short-term market adjustments linked to ongoing capital market reforms.

MSCI previously said it was freezing Indonesia’s May 2026 rebalancing process due to concerns over free-float transparency and public ownership structures that it said did not fully meet global investor standards.

As part of its May 2026 review, MSCI removed six Indonesian stocks from its Standard Index without adding any new constituents, while its Small Cap Index also saw multiple deletions. IDX said the changes had been anticipated and should be viewed as part of the market’s adjustment process during ongoing reforms.

Acting President Director of the IDX Jeffrey Hendrik, said the bourse respected the independence of global index providers and would not intervene in their review process ahead of MSCI’s upcoming index rebalancing in June.

“We are not in a position to intervene. We fully respect the independence of global index providers,” Jeffrey told reporters at the IDX building in Central Jakarta on Monday.

Indonesia’s benchmark stock index tumbled nearly 2% on Monday as escalating Middle East tensions, weaker Chinese economic data, and a plunging rupiah triggered broad-based selling across the market.

The Jakarta Composite Index (JCI) closed down 1.85%, or 124 points, at 6,559 after moving between 6,398 and 6,631 during the session. Declining stocks heavily outpaced gainers, with 616 stocks falling, 125 rising, and 79 unchanged.

Jeffrey said recent index adjustments by MSCI and FTSE had already been anticipated by the exchange and should be viewed as part of the market’s adaptation process during ongoing reforms being developed together with the Financial Services Authority and self-regulatory organizations.

“We believe this is a short-term response. Once this process passes, appreciation for these reform efforts will become positive in the long term,” he said.

Jeffrey added that the exchange would not intervene in the share prices of companies affected by the index removals, stressing that pricing should remain determined by normal market mechanisms.

“We will fully leave it to fair price formation in the capital market,” he said.

According to Pilarmas Investindo Sekuritas, domestic sentiment also deteriorated as the rupiah weakened beyond Rp 17,600 per US dollar, fueling concerns over Indonesia’s financial stability.

Market participants also reacted negatively to government remarks regarding the rupiah’s decline, which some investors viewed as insufficient to restore confidence in the country’s economic outlook.

“The market sees a strong commitment from the government and authorities as crucial to maintaining exchange-rate stability and rebuilding confidence in Indonesia’s economic fundamentals,” Pilarmas said in a note.