JAKARTA – Foreign investors logged their largest net purchase of Indonesian equities in more than four months on Tuesday (3/3), following regulatory steps to improve transparency and market access.

As reported by Bloomberg on Wednesday (4/3), global funds posted a net buy of USD 203.5 million on Tuesday (3/3), the highest level since 29 October.

Inflows began to reappear from the third week of February after earlier outflows triggered by a warning from Morgan Stanley Capital International (MSCI) over the potential downgrade of Indonesia to frontier market status.

Most recently, the capital market authority lowered the disclosure threshold for share ownership to 1% in response to MSCI’s concerns regarding transparency and free float.

Ownership disclosures will be updated regularly on a monthly basis. The policy aims to enhance clarity over ownership structures and safeguard the eligibility of Indonesian stocks in global indices.

Investors are now assessing whether the measure will be sufficient to maintain MSCI’s support and sustain foreign fund inflows.

“The latest update from the Indonesia Stock Exchange represents a firm step in addressing MSCI’s key concerns regarding transparency and investability,” wrote Ferry Wong, analyst at Citigroup Inc..

He added that disclosure of shareholders owning more than 1% would support a clearer picture of actual free float and help reduce uncertainty over liquidity and index eligibility for Indonesia’s leading stocks. (DH/ZH)