Indonesia Reforms Seen Averting MSCI Cut, Not Weighting Hit

Indonesian market reforms to meet MSCI Inc.’s demands may stave off a downgrade though they don’t go far enough to prevent a lower weighting in global indexes, some analysts said.

The measures, which include calling out some of the nation’s biggest companies for overly-concentrated ownership, will probably lead to some stocks getting culled by the index compiler in May due to insufficient shares for public trading, according to Citigroup Inc. and Alphagate Capital. MSCI in January had warned Indonesia could be cut to frontier-market status if it doesn’t address shareholding structure and possible collusion in trading.