JAKARTA - The Indonesian stock market is expected to face high volatility on Friday, May 29, 2026, as passive fund managers rebalance portfolios ahead of the effective change of the MSCI index on June 1, 2026. The rebalancing is a follow-up to the MSCI announcement delivered on May 12, 2026.
According to PasarDana Co-Founder and capital market practitioner, Dr. Hans Kwee, most fund managers have likely made portfolio adjustments gradually since the MSCI announcement was published, without waiting until the last day of the rebalancing.
"Seeing the pattern of stock movements after the MSCI announcement, it is likely that most fund managers have adjusted their portfolios without waiting until the last date of May 29, 2026," he said in his statement.
He added that although a number of stocks that were removed from the MSCI index were under pressure, the market was not showing any significant panic.
According to him, continued pressure is still potentially occurring, especially on stocks that are removed from the MSCI Global Standard Index and the MSCI Small Cap Index.
Hans assessed that the removal of a number of issuers from the MSCI index was more technical and related to the weighting methodology and stock liquidity, not due to a decline in the company's fundamentals.
"This does not reflect a change or decline in the fundamentals of the company. Many companies that are issued have good fundamentals, have very good prospects and currently have very attractive valuations," he explained.
He also assessed that the post-rebalancing phase of MSCI has the potential to be a bottom for the weakening of the JCI before it moves up again following the company's fundamentals going forward.
"Capital market reforms by OJK and SRO have succeeded in improving and strengthening the transparency, credibility, and integration of the Indonesian Capital Market so that it can increase the confidence of local and foreign investors," he concluded.
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