IDX Chief Resigns as MSCI Shock Triggers Two-Day Market Rout and Volatile Rebound

JAKARTA, Investortrust.id — The chief executive of Indonesia’s stock exchange resigned on Friday, Jan 30, 2026 in Jakarta after the Jakarta Composite Index plunged nearly 15% over two days and triggered back-to-back trading halts following MSCI’s decision to freeze index-related changes for Indonesian securities. The episode wiped out trillions of rupiah in market value and forced regulators and exchange officials into emergency responses.

Iman Rachman submitted his resignation as president director of the Indonesia Stock Exchange, saying the move was a form of responsibility for the extreme market turbulence. “As president director of the exchange and as a form of responsibility for what happened over the past two days, I hereby state my resignation,” he said at a press conference at the exchange.

He said he hoped the decision would help restore confidence. “Hopefully with my resignation, our capital market will become better,” he said.

The market turmoil followed MSCI’s announcement that it would temporarily freeze several index treatments for Indonesian stocks due to persistent concerns over free float and ownership transparency. The decision immediately shook investor confidence and triggered heavy selling across large-cap and index-linked shares.

MSCI said the move was driven by what it described as fundamental investability issues, including opaque ownership structures and concerns over coordinated trading that could distort price formation. While some market participants supported using shareholder data from the Indonesian central securities depository, MSCI said many investors questioned the reliability of shareholder categorization.

As a result, MSCI froze all increases to Foreign Inclusion Factors, halted new additions to its investable indexes, and blocked upward migration across size segments, with the measures applying to upcoming index reviews including February 2026. MSCI warned that if transparency improvements were insufficient by May, Indonesia could face a reduction in index weighting or even reclassification to frontier market status following consultation.

The impact on the domestic market was swift and severe. The Jakarta Composite Index fell nearly 15% over two consecutive sessions, including a one-day drop of as much as 8.8% on Wednesday, Jan 28, 2026, the steepest single-day decline in more than nine months, and triggered two trading halts.

Foreign investors recorded net selling of Rp 20.9 trillion in one session, while domestic investors posted net outflows of Rp 24.6 trillion, according to exchange data. Shares expected to be included in future MSCI reviews were among the hardest hit, with several stocks falling to their daily limit.

“MSCI influences large pools of global capital, so when they issue a warning, funds can rotate quickly out of markets,” said Kiswoyo Adi Joe, co-founder of AP Trading Insight Singapore. He said panic among domestic investors amplified the sell-off as foreign selling accelerated.

In response, exchange and regulatory officials pledged swift reforms. The exchange said it would work closely with regulators and market participants to improve transparency and reassess free-float standards, including consultations on the ideal free-float threshold and potential alignment with international practices.

Regulators have signaled plans to raise the minimum free-float requirement toward 10% to 15% in the near term, with a longer-term goal of 25%, in line with markets such as Hong Kong, India, and Thailand. Authorities are also coordinating with the central securities depository to provide more granular ownership data by investor type.

After two days of heavy losses, the market staged a volatile rebound on Friday morning. Within the first 15 minutes of trading, the Jakarta Composite Index jumped nearly 2%, defying weaker regional markets, as investors selectively returned to large-cap stocks.

The rebound was led by energy, transportation, and financial shares, with several heavyweight stocks posting gains of more than 2%. Among the biggest contributors were shares of Dian Swastatika Sentosa, which surged nearly 5%, alongside other large-cap names.

Despite the rebound, analysts cautioned that volatility was likely to persist until there was greater clarity on regulatory reforms and MSCI’s next steps. Market participants said sustained recovery would depend on credible progress in free-float transparency, ownership disclosure, and governance reforms.