Jakarta. Finance Minister Purbaya Yudhi Sadewa said on Wednesday that the sharp sell-off on the Indonesia Stock Exchange (IDX) following a report by MSCI Inc reflected an excessive market reaction to what he described as a preliminary assessment.

Purbaya was responding to a steep decline in the benchmark Jakarta Composite Index, which tumbled more than 7% after MSCI raised concerns over the investability of Indonesia’s equity market.

“I think this is an overreaction, because this is only an initial report,” Purbaya told reporters at the presidential palace in Jakarta.

New York-based MSCI Inc had introduced interim measures questioning the investability of Indonesian equities, citing limited transparency on free-float data. MSCI also flagged risks related to coordinated transactions that could distort price formation and noted concerns among market participants over the reliability of shareholder classification and limited visibility into ultimate ownership structures.

Purbaya said the market pressure was likely temporary and stressed that regulators were fully committed to addressing the issues raised. He said he had coordinated with the Financial Services Authority (OJK) and received assurances that all outstanding matters would be resolved promptly.

“I have spoken with the OJK chairman, and he said everything will be addressed before May. So this is just a temporary shock,” Purbaya said.

The finance minister called for internal reforms at the IDX, particularly in cracking down on price manipulation. He said such efforts align with the government’s broader push for a clean and credible capital market.

Investment Minister Rosan Roeslani echoed the call for stronger transparency and accountability at the IDX.

According to Rosan, MSCI’s assessments serve as a key reference for global investors when allocating capital across markets, making its governance recommendations impossible to ignore.

“The trigger for this [market decline] was the MSCI report. We expect our exchange to become more transparent, and we must follow up on their findings,” Rosan said at the presidential palace.

He said MSCI had highlighted the need for improved accountability, particularly regarding share ownership data and excessive ownership concentration. Even so, Rosan stressed that the current volatility does not reflect the underlying strength of Indonesian listed companies.

“The fundamentals of our companies remain very strong. But because MSCI is a global benchmark, we must act quickly to ensure we continue to meet their criteria,” he said.