Flooring Guide by Cinvex — JAKARTA — The Jakarta Composite Index (JCI) is projected to face high volatility during the trading session on Friday, May 29, 2026. This anticipated fluctuation is largely driven by portfolio rebalancing efforts from passive fund managers following the latest index evaluation results from Morgan Stanley Capital International (MSCI).
Capital market practitioner Hans Kwee noted that this volatility stems from the adjustments being made by institutional investors in response to the MSCI evaluation announced on May 12, 2026. “On Friday, May 29, 2026, the Indonesian stock market may experience significant volatility as passive fund managers execute their portfolio rebalancing to align with the May 12 MSCI announcement,” Hans explained on Thursday, May 28, 2026.
Despite the expected market movement, Hans believes that many investment managers have likely already front-run these adjustments, completing their portfolio rebalancing earlier to avoid the final day’s pressure. He observed that historical market patterns following MSCI announcements suggest the market is generally capable of absorbing these sentiments without major panic, even when specific stocks are removed from the index.
Navigating Technical Adjustments
Hans emphasized that while selling pressure is expected—particularly for stocks excluded from the MSCI Global Standard Index and the MSCI Small Cap Index—these removals are primarily driven by technical factors related to weighting methodology and liquidity. “This does not reflect a change or decline in the fundamental health of these companies,” he clarified. “Many of the excluded firms have strong fundamentals, excellent prospects, and are currently trading at very attractive valuations.”
Once the rebalancing process is complete, he expects the domestic stock market to stabilize and potentially regain upward momentum, supported by the solid fundamental performance of listed companies. “Post-rebalancing could mark a floor for the JCI’s recent decline, creating an opportunity for a recovery that aligns with the future fundamental growth of these companies,” Hans added.
Strengthening Market Credibility
Beyond the current volatility, Hans highlighted the ongoing capital market reforms led by the Financial Services Authority (OJK) and Self-Regulatory Organizations (SRO). He believes these initiatives have significantly bolstered the transparency, credibility, and integration of the Indonesian capital market, thereby fostering greater confidence among both local and international investors.
As of May 26, 2026, the JCI had recorded a year-to-date decline of 29.11%, or 2,516.75 points, settling at the 6,130.19 level.
MSCI Inc. officially released its May 2026 index review results, confirming that six Indonesian stocks would be removed from the MSCI Global Standard Index. All changes are set to take effect at the close of trading on May 29, 2026, with implementation beginning on June 1, 2026. Notably, the review saw no new Indonesian constituents added to the index, while AMMN, BREN, TPIA, DSSA, and CUAN were among those removed.
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Summary
The Jakarta Composite Index (JCI) is expected to experience significant volatility on May 29, 2026, due to portfolio rebalancing by passive fund managers following the latest MSCI index evaluation. While selling pressure is anticipated for stocks removed from the MSCI Global Standard and Small Cap indices, experts note that many institutional investors have likely front-run these adjustments. These changes are driven by technical factors rather than fundamental declines in the affected companies, which continue to maintain strong business prospects.
Market analysts suggest that the JCI may stabilize and potentially regain upward momentum once the rebalancing process concludes. This period is viewed as an opportunity for market recovery, supported by ongoing capital market reforms that have enhanced transparency and investor confidence. Despite a year-to-date decline, the market is expected to absorb the rebalancing effects without major panic as it aligns with the underlying fundamental growth of listed firms.