Economy

House Budget Body Chief Hits Back at MSCI: 'They Are Not Prophets'

Stateline MEDIA Newsroom•October 18, 2026•4 min read

Indonesia's House Budget Committee chair slammed MSCI over a market reclassification move that triggered an 11.57% plunge in the Jakarta Composite Index.

Key Facts

Said Abdullah, Ketua Badan Anggaran DPR RI, mengkritik MSCI melalui keterangan tertulis yang diterima Kompas.com, Minggu (18/10/2026).
Indeks Harga Saham Gabungan (IHSG) anjlok 11,57 persen ke level 5.185,10 pada perdagangan Jumat (16/10/2026), sehari setelah MSCI membuka konsultasi reklasifikasi pasar saham Indonesia.
MSCI mengusulkan reklasifikasi MSCI Indonesia Indexes dari kategori Emerging Market menjadi Standalone Market; keputusan final dijadwalkan paling lambat akhir Juni 2027.
Saham-saham kapitalisasi besar menjadi pemberat utama: BBCA turun 14,81 persen, BBRI melemah 14,84 persen, BMRI terkoreksi 14,82 persen, dan TLKM turun 14,80 persen.
Menurut Said, BEI, KSEI, dan OJK telah bertahap menjalankan rekomendasi MSCI: OJK menaikkan ketentuan free float berjenjang 15, 20, dan 25 persen serta menjatuhkan ratusan sanksi kepada pelaku pasar.
JPMorgan memperkirakan reklasifikasi dapat memicu arus keluar dana pasif sekitar US$4,8 miliar, sedangkan UBS memperingatkan investor aktif berpotensi menarik tambahan dana hingga US$15 miliar, menurut laporan Reuters.

Sharp Criticism from House Budget Committee Chief

Said Abdullah, Chair of the House of Representatives' Budget Committee (Banggar DPR RI), leveled fierce criticism against Morgan Stanley Capital International (MSCI) after the global index provider's announcement rattled Indonesia's stock market. In a written statement received by Kompas.com on Sunday (10/18/2026), Said remarked that MSCI's move came without warning.

"MSCI's announcement regarding the Indonesia Stock Exchange (BEI) came like a bolt from the blue," Said stated. In trading on Friday (10/16/2026), the Composite Stock Price Index (IHSG) tumbled 11.57 percent to 5,185.10, just a day after MSCI initiated a consultation to reclassify the Indonesian equity market.

According to Said, a shock of this magnitude deserves to be questioned. He expressed hope that MSCI's policy is genuinely aimed at improving exchange governance, adding that corrections from MSCI should still be taken as serious material for evaluation.

BEI Moved into Standalone Category

On October 15, 2026, MSCI opened a consultation to reclassify the MSCI Indonesia Indexes from Emerging Market to Standalone Market status—a distinct classification designated for markets deemed in need of special attention regarding market accessibility and governance. A final decision is expected by the end of June 2027 at the latest.

The announcement sparked massive sell-offs. The BEI even temporarily halted trading via a circuit breaker mechanism after the IHSG's plunge touched 8 percent, before selling pressure intensified further toward market close.

The turn of events caught the government and capital market authorities off guard, particularly as the announcement came shortly after representatives from the government, BEI, the Financial Services Authority (OJK), and Danantara met with MSCI leadership in Bangkok, Thailand. The meeting, held roughly a week earlier, had given no open indication of an imminent threat to Indonesia's market status.

'MSCI Is Not a Prophet'

In his statement, Said stressed that Indonesia must not be treated merely as a passive party that can only comply. "MSCI is not a religious body where absolute truth resides, and MSCI leaders are not prophets holding exclusive, infallible authority," he asserted, adding that Indonesia has every right to remain critical of them.

Said argued that a mutually critical relationship is healthy for both sides. He noted that, without intending to defend the BEI or OJK, both institutions have progressively implemented policy suggestions from MSCI, as reflected in their performance reports submitted to the House of Representatives (DPR).

He cited as an example that OJK has raised free-float requirements using a tiered framework based on market capitalization—namely 15, 20, and 25 percent. OJK has also imposed hundreds of sanctions on exchange market participants. "The question is, why has this step received zero appreciation from MSCI?" Said remarked.

Market Fears Foreign Capital Flight

Investor concerns have centered on potential shifts in foreign capital allocation. Four mega-cap stocks served as the primary drag on the IHSG during Friday's trading: BBCA fell 14.81 percent, BBRI weakened 14.84 percent, BMRI slid 14.82 percent, and TLKM dropped 14.80 percent.

Several global banks estimate the reclassification could spark massive capital outflows. JPMorgan projects potential passive outflows to reach US$4.8 billion, while UBS warned active investors could withdraw an additional US$15 billion, according to a Reuters report.

Panin Sekuritas analyst Elandry Pratama assessed that stock movements should be evaluated based on the specific conditions of each issuer. He pointed out that not all stock declines last Friday were automatically tied to MSCI, meaning company-specific catalysts and characteristics still require close scrutiny.