Indonesia Stock Exchange Engages MSCI on Free Float Methodology

Meeting Highlights

The Indonesia Stock Exchange (BEI) recently conducted a crucial meeting with Morgan Stanley Capital International (MSCI) in New York to discuss forthcoming changes to the free float calculation methodology scheduled for 2026 ¹

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Source 2

https://finance.detik.com/berita-ekonomi-bisnis/d-8264478/bos-bei-temui-pimpinan-msci-di-new-york-bahas-nasib-metodologi-free-float

. The meeting, led by BEI's CEO Iman Rachman, focused on addressing concerns regarding MSCI's proposed use of Monthly Holding Composition Reports from the Indonesian Central Securities Depository (KSEI) as an additional data source ¹

Source 1

https://investasi.kontan.co.id/news/bei-temui-pimpinan-msci-minta-perubahan-metodologi-tak-diskriminatif

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Key Discussion Points

1. Methodology Concerns: BEI emphasized the importance of ensuring that any new methodology is non-discriminatory and does not unfairly impact Indonesian stocks.
2. Data Source Proposal: MSCI is considering using KSEI's Monthly Holding Composition Reports to enhance the accuracy of free float calculations.
3. Market Impact: Stakeholders are concerned about potential changes in the free float percentage for Indonesian companies, which could affect their inclusion in MSCI indexes.
4. Collaborative Approach: The meeting was described as constructive, indicating a willingness from both parties to work together on the methodology changes.

Market Implications

The outcome of these discussions could have significant implications for Indonesian equities, potentially affecting their representation in global investment benchmarks. A change in methodology could lead to adjustments in the free float market capitalization of Indonesian companies, impacting their weightings in MSCI indexes.