MSCI Maintains Korea and Indonesia’s EM Status; Korea Reform Path Intact, Indonesia Downgrade Risk Deferred

研报英文原文证据摘录

MSCI Maintains Korea and Indonesia’s EM Status; Korea Reform Path Intact, Indonesia Downgrade Risk Deferred

Goldman Sachs Asia Index Strategy

Indonesia: Frontier Market Downgrade Risk Deferred, Not Removed

Indonesia avoided an immediate Frontier Market (FM) downgrade consultation, but

MSCI’s message remains cautious. If sufficient progress is not evident by the

November 2026 Index Review, MSCI may consider a range of treatments, including a

potential consultation on reclassifying Indonesia from EM to FM.

MSCI acknowledged the reform progress made since January, including enhanced

disclosure for shareholders above 1%, more granular investor classification, the High

Shareholding Concentration framework, and a roadmap to raise the minimum free-float

requirement to 15%. That said, implementation remains key: investors are focused on

whether these reforms translate into improved free-float determination and better

investability in practice.

MSCI Indonesia is down 40% YTD in USD terms, with roughly US$4bn of foreign outflows,

and now represents only 0.4% of MSCI EM. MSCI and FTSE index adjustments in the

May/June reviews, after incorporating newly disclosed information, have already driven

around US$2.1bn of passive outflows — US$1.7bn from MSCI and US$400mn from FTSE.

Active positioning has also de-risked, with EM/AEJ funds trimming Indonesia exposure

in aggregate from around 50bp OW in January to 25bp OW in May, despite an already

lower benchmark weight from FIF cuts and deletions. We estimate a full EM-to-FM

reclassification could trigger around US$5bn of additional passive outflows from

MSCI index-tracking funds, with a further US$3.5bn if FTSE were to follow, though FTSE

has not placed Indonesia under review.