Indonesia Equity Strategy: Indonesia‘s MSCI weight is below 50bps but S&P keeps rating unchanged with stable outlook

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Indonesia Equity Strategy: Indonesia‘s MSCI weight is below 50bps but S&P keeps rating unchanged with stable outlook

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13 Jul 2026 06:48:55 ET │ 14 pages

Indonesia Equity Strategy

Indonesia's MSCI weight is below 50bps but S&P keeps rating

unchanged with stable outlook

CITI'S TAKE

Indonesia’s MSCI EM weight has fallen to just 0.46% as of July 2026,

down sharply from 1.18% a year earlier and now only marginally ahead of

the Philippines (0.30%). The EM index has become overwhelmingly a Ferry Wong, CFAAC

North Asia story: Taiwan (27.16%), Korea (21.67%) and China (20.22%) +62-21-2924-9213

together account for ~69% of the benchmark, up from ~59% in July 2025. ferry.wong@citi.com

Taiwan and Korea alone now make up nearly 49%, versus ~30% a year Ryan Davis

ago, as the AI and semiconductor complex has pulled index weight +62-21-2924-9218

decisively toward the north. India has slipped from 17.73% to 11.39%. We ryan1.davis@citi.com

retain our cautious medium to longer term stance but more positive near

term due to improvement in government policy on fiscal, fuel subsidy,

interest rate and S&P maintain its rating but continue to relatively prefer

defensive and commodity-related names — BBCA, AMMN, ADMR and

INCO.

-A fresh historical low. Indonesia’s weight in the MSCI EM Index has more than

halved over the past year, from 1.18% to 0.46%. To put this in perspective, Taiwan,

China and Korea collectively command roughly 69% of the index, while Indonesia —

the region’s largest economy by population and GDP — now carries a weight lighter

than Thailand (0.99%) and Malaysia (0.94%), and barely above the Philippines. This

under-representation is a direct consequence of the MSCI freeze and HSC-driven

exclusions, compounded by ASEAN’s de-rating against AI-levered North Asian

markets.