MSCI says Indonesia's Barito Pacific will be removed from its indexes

What happened

MSCI said it will remove Indonesia’s Barito Pacific from its global standard index after trading closes on November 30. Bumi Resources Minerals will move from that index to the small-cap index. MSCI said the deletions will require funds that track its indexes to sell the affected shares.

Confirmed

Global impact / market context

Index-tracking funds sell shares when a company leaves an index, creating direct selling pressure on Barito Pacific around the change. The removal also adds to concerns about Indonesia’s ability to retain emerging-market status, which could influence how investors allocate money to Indonesian shares.

Analyst inference

The article says MSCI previously warned Indonesian stocks could face broader removals and a downgrade to standalone status, after citing weak ownership transparency and coordinated trading. Indonesia’s benchmark index was down over 40% this year, adding to pressure on authorities to address those concerns.

Confirmed

What to watch

1. Watch for the index changes to take effect after trading closes on November 30, when funds tracking MSCI’s indexes are expected to sell affected shares. Confirmed
2. Watch whether Indonesian authorities follow through on tighter disclosure requirements and plans to address MSCI’s concerns about ownership transparency and coordinated trading. Proposed
3. Further removals or a downgrade could reduce demand from funds tracking emerging-market indexes, adding to selling pressure and making it harder for Indonesian companies to attract investment. Analyst inference

Evidence

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