lobal index compiler MSCI has decided to keep its measures on Indonesian equities in place for the May index review, despite efforts by local authorities to address the transparency concerns outlined in the firm’s January warning. The organization said it is still assessing the effectiveness of the remedies introduced and is set to make a final decision in its June review.
The uncertainty weighed on investor sentiment, with the Indonesia Stock Exchange (IDX) Composite Index slipping 0.46 percent on Tuesday, even as major Asian markets such as Tokyo, Seoul and Hong Kong advanced on optimism that the Iran conflict may be nearing an end.
In an announcement on Monday, MSCI stated that it “acknowledges” the “market transparency reforms” made by the IDX, Financial Services Authority (OJK) and Indonesia Central Securities Depository (KSEI).
The measures listed by MSCI comprise enhanced shareholders disclosure, increased granularity in investor classification, introduction of the high shareholding concentration (HSC) framework and the roadmap for the increase of minimum free float requirement to 15 percent.
Interim IDX president director Jeffrey Hendrik said in a statement on Tuesday that IDX had met with MSCI last Thursday and “appreciated” MSCI’s acknowledgment of the remedies.
“We will keep communicating with index providers. We will also keep communicating with global investors to get inputs for reinforcement of the capital market going forward,” said Jeffrey.
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