Citigroup said that MSCI is likely to maintain Indonesia's classification as an emerging market country, but it may continue the index freeze measures until next year. Analysts Ferry Wong, Lakshmi Rowter and others stated in the research report: “Our benchmark scenario is that MSCI will maintain Indonesia's emerging market status in the November 11 assessment, but extend the freeze period until February 2027. The full lifting of the freeze may occur in February or May 2027.” According to the report, there is still a downside risk of a downgrade to the frontier market, “but considering that Indonesia has introduced a number of extensive reforms, we don't think the probability of this scenario happening is high.” According to the report, the Indonesia Stock Exchange and the Central Securities Depository have drastically tightened the rules relating to high equity concentration and released shareholding data covering 39 categories of investors on a monthly basis. The report argues that the Jakarta Composite Index valuation is at a “crisis level” low, but there was a lack of a catalyst for capital inflows before the results were announced on November 11. Maintain a cautious view and recommend defensive targets and exporters.

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