Jakarta. Indonesia retained its status as an emerging market in MSCI's 2026 Global Market Accessibility Review, easing concerns that the country could be downgraded to frontier market status amid ongoing scrutiny over market transparency and accessibility.

While keeping Indonesia in the Emerging Markets category, MSCI lowered its assessment of the country's information flow to negative from positive, citing persistent concerns over opaque share ownership structures and indications of coordinated trading that could undermine fair price discovery.

"Concerns around market accessibility stem from unclear ownership structures and indications of coordinated trading behavior that weaken the process of fair price formation," MSCI said in its report released on Friday.

The review ends months of uncertainty that had weighed on Indonesia's capital market since MSCI first raised concerns in January over transparency in share ownership and the effectiveness of price formation mechanisms. The warnings triggered foreign selling pressure and contributed to volatility in the Jakarta Composite Index throughout the year.

MSCI said limited transparency in ownership data and market activity continued to hamper investors' ability to accurately assess free-float shares.

"A lack of transparency in ownership data and market activity undermines proper price formation and limits global investors' ability to assess the actual amount of freely tradable shares," MSCI said.

The index provider also reiterated concerns over Indonesia's foreign exchange market, noting the absence of an efficient offshore market and constraints in the domestic currency market that continue to hinder international investors.

"There is no efficient offshore foreign exchange market, and constraints remain in Indonesia's domestic foreign exchange market," MSCI said.

Despite these concerns, MSCI acknowledged measures introduced by Indonesian authorities in recent months to improve market accessibility.

In a research note citing MSCI's review, Indo Premier Sekuritas said Indonesia continued to score highly on several market accessibility indicators, including investor qualification requirements, foreign ownership limits, foreign ownership availability, investor registration, account opening, market regulations, custody services, and trading infrastructure.

However, MSCI assigned lower scores to Indonesia's foreign exchange market liberalization and information flow, while equal rights for foreign investors, clearing and settlement, stock lending, short selling, and institutional stability received moderate assessments.

Kiwoom Sekuritas said the main risk following MSCI's latest review is not the loss of Indonesia's emerging market status, but the possibility of a prolonged valuation discount.

"Until there are significant improvements in transparency, free-float quality, and market integrity, foreign investors may continue to maintain an underweight position on Indonesia," Kiwoom Sekuritas said.