MSCI flags transparency concerns in Indonesia, downgrades information flow criterion

MSCI downgraded Indonesia's information flow criterion to negative due to limited transparency in shareholding structures and market data, hindering global investors' ability to assess listed companies.

MSCI ​said on Thursday that ​investability concerns in Indonesia ‌persist due ​to limited transparency in shareholding structures and signs of coordinated trading behavior, ‌as it released the results of its 2026 Global Market Accessibility Review.

The index provider downgraded Indonesia's information flow criterion to ‌negative, highlighting shortcomings in the availability and reliability ‌of market data. MSCI said opacity in ownership data and market activity undermines proper price formation and constrains global investors' ability to assess ⁠the ​true free ⁠float of listed companies.

MSCI also pointed to foreign exchange market limitations ⁠as another barrier for investors. "There is no efficient offshore currency ​market and there are constraints on the onshore currency ⁠market in Indonesia," MSCI said, noting that the level of foreign ⁠exchange liberalisation ​remains limited.

Indonesia's capital markets have suffered since MSCI in January flagged transparency concerns and warned of ⁠a downgrade to frontier status from emerging, a move that could ⁠trigger outflows ⁠worth as much as $13 billion.