Indonesia’s transparency push calms MSCI fears, but reform continuity is key

[JAKARTA] Indonesia’s swift moves to boost ownership transparency and align with MSCI’s standards have calmed fears of a market downgrade, but analysts say the real test will be sustaining reform momentum and macro policy credibility to sustain investor confidence.

For now, analysts reckon Indonesia’s swift-footed transparency measures are sufficient to avert losing emerging market status – an outcome MSCI had warned about should the country fail to address its concentrated free-float ownership issue.

Mohit Mirpuri, senior partner at SGMC Capital, said Indonesian authorities have already shown a willingness to respond and have acted swiftly to engage with MSCI, demonstrating a proactive approach that reduces the risk of a more severe outcome.