FTSE Russell to Delete Concentrated Indonesian Stocks at "Price of Zero" in Major June Shakeup

JAKARTA, Investortrust.id — Global markets are bracing for a major liquidity shock after FTSE Russell, the influential index provider owned by the London Stock Exchange Group, announced it will purge Indonesian stocks with highly concentrated ownership from its benchmarks at a valuation of zero. This "nuclear option" for index deletion is set to take effect at the open on Monday, June 22, 2026, as the provider moves to protect the integrity of its global tracking products.

The decision follows a period of intense scrutiny over the "investability" of Southeast Asia’s largest economy. FTSE Russell noted that securities subject to high shareholding concentration (HSC) notices from local regulators will be removed because extreme illiquidity prevents passive fund managers from executing an orderly exit without massive market impact.

For institutional investors, this is a clear signal that "size" no longer guarantees safety in the Indonesian market. By deleting stocks at a price of zero, FTSE is effectively forcing passive funds to liquidate positions regardless of market value, which could trigger a massive capital flight from specific large-cap names. The extended "observation period" through September also means multi-billion dollar IPOs and share increases will remain locked out of global capital flows for another quarter.

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The Fight for Credibility

The Financial Services Authority (OJK), Indonesia’s financial services regulator, has been racing to prevent a broader market downgrade. Hasan Fawzi, OJK’s Executive Head of Capital Market Supervision, recently emphasized that the regulator has already met various global requirements, including enhancing transparency for any ownership stake above 1%.

"We hope they [index providers] consistently state recognition of the integrity reform efforts we are making," Fawzi said during a press conference in Jakarta on Wednesday. He noted that the publication of HSC lists and more granular investor data was designed specifically to give index providers the information they need to calculate accurate free-float portions.

Passive Fund Replicability Risk

FTSE Russell's hardline stance reflects deep-seated concerns that index-tracking investors may be unable to find sufficient counterparts to trade these concentrated stocks. The provider stated that current market conditions give rise to "potential risk to index replicability," prompting the decision to act during the June review.

While the OJK remains optimistic that Indonesia will maintain its "Emerging Market" status, the road back to full inclusion remains blocked. FTSE confirmed it would proceed with minor classification updates but will defer all full index re-ranking and the inclusion of new Indonesian listings until at least the September 2026 review cycle.