Jakarta. MSCI’s August 2026 Index Review is expected to weigh on sentiment toward Indonesian stocks, but its impact on the broader market should remain limited as potential fund outflows are concentrated on affected stocks, Mirae Asset Sekuritas Indonesia said.

The review removed GoTo Gojek Tokopedia (IDX:GOTO) from the MSCI Indonesia Investable Market Index and downgraded Charoen Pokphand Indonesia (CPIN) from the Global Standard Index to the Global Small Cap Index.

Indonesian stocks fell 1.18% or 75 points to 6,298 as of the close of the first trading session on Thursday.

“MSCI August 2026 Index Review provided a more negative result for the Indonesian market. As we expected, CPIN was downgraded from Global Standard to Small Cap, while the risk to GOTO materialized with its removal from the MSCI Indonesia Investable Market Index,” Head of Research and Chief Economist Rully Arya Wisnubroto said.

Rully said GOTO’s removal was linked to its low liquidity after the stock remained at the minimum price of Rp 50 ($0.003) since May, raising concerns over passive investors’ ability to replicate the index.

“MSCI specifically cited the low liquidity caused by GOTO remaining at the minimum price of Rp 50 since May as the reason for potential index replicability issues,” Rully said.

The changes could trigger passive outflows ahead of the index rebalancing at the end of August. However, Mirae Asset expects the pressure to remain concentrated on stocks directly affected by the changes rather than significantly affecting the Jakarta Composite Index.

“The main impact is technical, with potential passive outflows ahead of the implementation at the end of August. The absence of Indonesian stocks being added to the Standard Index also means there will be no offsetting inflows, in line with the restrictions MSCI still has in place,” Rully said.

Research Analyst Wilbert Arifin said the relatively small change in Indonesia’s weighting in the MSCI Emerging Markets Index also points to a limited broader-market impact.

Indonesia’s weighting is estimated to decline from around 0.49% to 0.46%, while Wilbert estimated passive outflows at Rp 500 billion to Rp 1 trillion on the effective rebalancing date following trading on Aug. 31.

“In the short term, there may be some impact on sentiment because there were no additions and only reductions. However, the impact on the overall market is expected to be minimal and more concentrated on directly affected stocks, such as CPIN,” Wilbert said.

Looking ahead to the next MSCI review in November, Wilbert said Indonesia needs to maintain market credibility and strengthen communication between regulators and MSCI.

Gradual improvements in these areas could increase the chances of more favorable MSCI decisions and provide an additional catalyst for foreign capital inflows and the broader stock market, he said.

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