The global index provider, FTSE Russell, is set to remove Indonesian stocks identified with high ownership concentration from its indices. This significant decision will be implemented during the upcoming June 2026 index review.
FTSE Russell highlighted that market feedback strongly indicates a projected significant deterioration in the liquidity of these particular stocks as the June 2026 index review approaches. This impending challenge for market participants necessitated a proactive response from the index provider.
Explaining the rationale behind its decision, FTSE Russell stated in its announcement on Wednesday, May 13, 2026, that “Under such conditions, index-tracking investors may not be able to divest in an orderly manner without excessive market impact or sufficient counterparty availability, thus posing a potential risk to index replicability.” This underscores the critical need to safeguard the integrity and functionality of their indices.
Consequently, to uphold both index integrity and replicability, FTSE Russell will proceed with the removal of these specified stocks at a zero price. This crucial change will become effective at the opening of trading on Monday, June 22, 2026.
While acknowledging the ongoing efforts by regulators to reform Indonesia’s capital market, FTSE Russell has, for now, opted to defer a full index re-rating, enhancements to free-float requirements, and the addition of new Indonesian-listed stocks. These comprehensive updates are now scheduled for the September 2026 index review. FTSE Russell reaffirmed its commitment, stating that they “will continue to closely monitor market developments in Indonesia and maintain communication with local market authorities.”
Despite these deferrals, the June 2026 review for Indonesia will still include several key index updates. These encompass: first, updates to the Industry Classification Benchmark; second, quarterly stock updates, notably without the application of the 1% threshold; third, quarterly free-float adjustments; fourth, changes in large, mid, small, or micro-cap classifications resulting from spin-offs; and fifth, updates to the exclusion list based on comprehensive ESG (Environmental, Social, Governance) data.
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Summary
FTSE Russell has announced the removal of Indonesian stocks with high ownership concentration from its indices, effective June 22, 2026. This decision follows concerns that liquidity constraints could prevent index-tracking investors from divesting assets without causing excessive market impact. To protect index integrity and replicability, these specific stocks will be removed at a zero price.
While the provider has deferred broader index re-ratings and new additions until September 2026, the June review will still proceed with routine updates. These include adjustments to industry classifications, quarterly free-float changes, and ESG-based exclusions. FTSE Russell continues to monitor Indonesian market reforms and maintain dialogue with local authorities to ensure future stability.