JCI Plunged -7.3% on MSCI Announcement
MSCI news this morning triggered a wave of panic selling.
MSCI Announcement Caused Wave of Panic Selling
Today, the Jakarta Composite Index (JCI) dropped -7.3% after MSCI’s announced that they will apply an interim freeze on certain index related changes for Indonesian securities to limit excessive index turnover and manage investability risks while awaiting improvements in market transparency.
During this period, MSCI will not increase foreign ownership limits, add new Indonesian stocks to its indexes, or upgrade stocks to higher index segments. If transparency issues are not sufficiently addressed by May 2026, MSCI may reassess Indonesia’s market status, which could result in a lower weighting in MSCI Emerging Market indexes or even a potential downgrade to “frontier-market” status. MSCI will continue working with Indonesian regulators and market participants and will provide updates as the situation evolves.
This decision follows MSCI’s announcement last October where they stated that they were considering a change to how they measure “free float” – the portion of a company’s shares that are available to trade for the public. Free float concerns have lingered in recent years, with investors stating that some of the country’s largest companies are thinly traded and largely controlled by conglomerates. This causes a concentrated ownership which can lead to sharp price swings and risk of market manipulation.
The news caused a wave of panic selling from investors, with the JCI closing out the day lower by -7.3% and the index experiencing a trading halt during the second trading session. The sell-off was broad based across blue-chip stocks, with the IDX30 falling -5.9%, and momentum stocks. A handful of stocks, especially conglomerate stocks, even hit auto-reject bawah (ARB).
How Simpan reacted and our outlook ahead
We view the recent market pullback as an opportunity and used it to add exposure to names on our watchlist, particularly within the commodities sector. As highlighted in our earlier articles, when the JCI was trading at all-time highs, we took profits in stocks that had rallied and built up cash positions. With markets now correcting, we are redeploying that cash.
We think this is an opportunity to gradually buy the dip, and we encourage investors to consider rotating into our Sustainable Equity Fund. The fund offers a balanced mix of high-quality blue-chip and momentum stocks that we hold with strong conviction and see long-term potential in. In times like this, it’s important to remind ourselves that market volatility is normal—and that staying focused on long-term outcomes is often more effective than reacting to short-term noise.