Indonesian stocks dropped 7% on Jan. 28, 2026, after MSCI paused index changes over transparency concerns, risking a downgrade and massive capital outflows.

On January 28, 2026, Indonesian stocks fell by almost 7% after MSCI halted index adjustments because of persistent worries about low free float and unclear ownership structures. Major banks and conglomerates suffered the most as the Jakarta Composite Index fell to 8,393 points. MSCI warned that a possible downgrade to frontier-market status by May could result in capital outflows of up to 40 trillion rupiah, citing a lack of transparency and insufficient progress on data disclosure. The agency runs the risk of holding fewer passive funds if it uses different data to determine actual liquidity. The IDX and regulators promised to collaborate with MSCI to increase transparency.