Indonesia’s stock market is expected to face heightened volatility on Friday (29/5/2026), as passive fund managers are likely to rebalance their portfolios following the MSCI announcement released on May 12, 2026, which will officially take effect on June 1, 2026.

Based on the movement patterns of stocks and the Composite Stock Price Index (IHSG) after the MSCI announcement, most investment managers are believed to have started adjusting their portfolios without waiting for the final deadline on May 29, 2026.

“What is interesting is that the market has not shown significant panic even though several stocks removed from the MSCI index experienced downward pressure,” said Pasar Dana Co-Founder and capital market practitioner Hans Kwee in a statement quoted on Friday (29/5/2026).

Nevertheless, Hans noted that downside pressure could still continue, particularly for stocks removed from the MSCI Global Standard Index and the MSCI Small Cap Index. However, he emphasized that MSCI’s deletion of several Indonesian issuers was mainly driven by technical considerations related to weighting methodology and liquidity rather than deteriorating corporate fundamentals.

“Many of the companies removed actually have solid fundamentals, strong business prospects, and currently attractive valuations,” Hans explained.

He further stated that once the MSCI rebalancing process is completed, the situation could potentially mark the bottom of the IHSG decline before the index rebounds in line with corporate fundamentals going forward.

In addition, capital market reforms implemented by the Financial Services Authority (OJK) and Self-Regulatory Organizations (SRO) are considered successful in strengthening transparency, credibility, and integration within Indonesia’s capital market, thereby improving the confidence of both domestic and foreign investors.

IHSG Outlook and Stock Recommendations

Meanwhile, BRI Danareksa Sekuritas stated that the effective MSCI rebalancing scheduled at today’s market close is expected to increase short-term market volatility.

The IHSG is projected to have support at 6,060 and resistance at 6,240. In the previous trading session, the index closed down 1.23% at 6,130, while net foreign selling in the regular market reached Rp1.89 trillion.

The IHSG weakness occurred amid rising profit-taking activity and pressure on several large-cap and commodity-related stocks. The rally in Barito Pacific Group shares, which had previously supported the index, was deemed insufficient to withstand the broader market correction.

“Technically, the IHSG still has the potential to move within a weakening consolidation trend with resistance around 6,240 and support at 6,060,” BRI Danareksa Sekuritas wrote in its research report on Friday (29/5/2026).

Market participants are also expected to closely monitor pressure on the rupiah exchange rate, which has approached Rp16,800 per US dollar, as this condition could trigger further capital outflows.

BRI Danareksa Sekuritas recommended buying EMAS shares with a target price range of Rp7,900–Rp8,275 for day trading and a stop loss below Rp7,200.

In addition, PGAS shares were also recommended for purchase with a target price range of Rp1,925–Rp1,955 for day trading and a stop loss below Rp1,850.

Meanwhile, TOWR and BSDE shares were recommended for selling, with target prices set at Rp370 and Rp645 respectively.