TEMPO.CO, Jakarta – Global index provider MSCI Inc. has updated its screening methodology for stocks experiencing extreme price increases, known as Extreme Price Increase (EPI), with the new rules set to take effect during the August 2026 index review.
Under the revised methodology, stocks flagged as EPI with a Foreign Inclusion Factor (FIF) of 0.75 or higher will be exempt from the EPI screening process. These stocks will remain eligible for inclusion in the MSCI Global Standard Index, provided they meet all other index inclusion requirements.
“Stocks flagged as EPI with an FIF of 0.75 or higher will be excluded from the EPI screening and will remain eligible for addition to the Standard Index, subject to meeting all other inclusion requirements,” MSCI management said in an announcement on Friday, July 17, 2026.
Treatment for EPI Stocks with Lower Foreign Ownership Factor
For stocks categorized as EPI with an FIF below 0.75 that meet other requirements for inclusion in the MSCI Global Standard Index, MSCI will apply different treatments.
Stocks that are not currently constituents of the MSCI Investable Market Index (IMI) will not be added to the MSCI Global Standard Index. Instead, they will remain in the Market Investable Universe and be reassessed during the next index review.
Meanwhile, existing constituents of the MSCI Small Cap Index that experience extreme price increases will be evaluated based on their market capitalization compared with the Market Size-Segment Cutoff for the MSCI Global Standard Index.
MSCI Sets Market Capitalization Thresholds
MSCI said stocks with full market capitalization below 1.8 times the market size-segment cutoff for the MSCI Global Standard Index, or those with free float-adjusted market capitalization below 1.8 times half of the cutoff threshold, will remain constituents of the MSCI Small Cap Index.
However, stocks with full market capitalization equal to or above 1.8 times the MSCI Global Standard Index cutoff, as well as those meeting the equivalent free float-adjusted market capitalization threshold, will not be added to the MSCI Global Standard Index.
Instead, these stocks will be removed from the MSCI Small Cap Index but retained in the Market Investable Universe for evaluation in the following index review, including potential inclusion in the MSCI Global Standard Index.
The methodology update comes as MSCI continues to refine its index rules amid market developments and concerns over stock price volatility, liquidity, and foreign investor accessibility.
Click here to get the latest news updates from Tempo on Google News
S&P Dow Jones Adds Indonesia to Market Reclassification Watchlist
9 hari lalu
S&P DJI continues to monitor the development of stock ownership transparency in Indonesia and guidelines issued by the Indonesia Stock Exchange to address the issue.
MSCI Keeps Indonesian Stock Freeze in August Review
10 hari lalu
MSCI has decided to leave Indonesian stocks out of its August 2026 index review.
A Five Months Reprieve, Not A Rescue
11 hari lalu
Indonesia avoided an immediate MSCI downgrade, but not the market's verdict.
Indonesia's Stock Exchange Faces 27% Risk of MSCI Downgrade
13 hari lalu
In the latest Market Classification Review released on June 24, 2026, MSCI has decided to maintain Indonesia's stock exchange status at the emerging market level.
Rupiah Weakens Amid Domestic Sentiment Pressure
14 hari lalu
The rupiah exchange rate at the Thursday afternoon trading close weakened by 43 points or 0.24 percent to Rp17,995 per US dollar.
MSCI Status Shows Indonesia's Strong Market Accessibility, Airlangga Says
22 hari lalu
Minister Airlangga Hartarto states that Indonesia retaining its Emerging Market status in the MSCI 2026 review proves strong market accessibility.
OJK Pledges More Reforms After MSCI Reviews Indonesia
23 hari lalu
The Financial Services Authority (OJK) promises to strengthen the market reform agenda in response to the Morgan Stanley Capital International (MSCI) review.
MSCI Keeps Indonesia as Emerging Market, Warns of Concerns
23 hari lalu
MSCI will continue to assess the effectiveness and sustainability of Indonesia's capital market reform until November 2026.
JCI, Rupiah Weaken Ahead of MSCI Decision
23 hari lalu
Jakarta Composite Index (JCI) closed at 6,101 and the rupiah exchange rate closed at Rp17,859 per US dollar.
Investors Warned to Monitor MSCI Review Impact on Indonesia Stocks
25 hari lalu
A potential downgrade of Indonesia's market classification to frontier market status by MSCI had emerged as a worst-case scenario.
