FTSE Russell is moving forward with a significant rebalancing of the FTSE Global Equity Index Series (GEIS) ahead of its June 2026 review. A central pillar of this adjustment is the decision to exclude stocks identified as having high shareholding concentration (HSC) from the index, a move designed to align with global investor standards and mitigate speculative risks.
HSC refers to companies listed on the Indonesia Stock Exchange (IDX) where the majority of shares are held by a small group of stakeholders or affiliated parties. The IDX releases this data to bolster market transparency and ensure compliance with international best practices. Consequently, major stocks such as Prajogo Pangestu’s PT Barito Renewables Energy Tbk (BREN) and the Sinarmas Group’s PT Dian Swastatika Sentosa Tbk (DSSA) now face the risk of exclusion from FTSE indices.
FTSE Russell stated that it continues to monitor the Indonesian capital market closely, building on the notification issued on February 9, 2026. The index provider maintains ongoing communication with market stakeholders as part of its comprehensive policy evaluation. FTSE acknowledged the proactive measures taken by Indonesian authorities to improve transparency, including the disclosure of shareholding data exceeding 1%, the publication of the HSC list, and enhanced investor classification reporting.
Despite these improvements, after consulting with market participants and its external advisory committee, FTSE Russell confirmed it will maintain specific treatments for Indonesian equities during the June 2026 review. Key policies include the update of the Industry Classification Benchmark (ICB), quarterly share adjustments without the standard 1% buffer, and a quarterly free-float reduction without the standard 3% buffer. Furthermore, FTSE will continue to implement changes to market capitalization categories following corporate demergers, while updating ESG, ethical, and Sharia-compliant exclusion lists based on the latest data. FTSE Russell also hinted at the possibility of extending this observation period.
“FTSE Russell will continue to defer full index ranking adjustments, free-float increases, and the addition of Indonesian IPO securities until at least the September 2026 index review,” the company announced on Wednesday, May 13.
Addressing High Shareholding Concentration
Beyond the current restrictions, FTSE confirmed that companies flagged by regulators for high shareholding concentration will be removed from the index in the upcoming review, in accordance with its free-float threshold guidelines. FTSE expressed concerns that the liquidity of these affected stocks could drop significantly ahead of the June 2026 review. Such a scenario could hinder index-based investors from divesting orderly, potentially triggering excessive market pressure or liquidity constraints that threaten the integrity of index replication.
To address this, FTSE Russell has decided to remove the affected stocks at a zero value during the June 2026 index review. This policy is set to take effect at the opening of trading on Monday, June 22, 2026. While the specific list of affected stocks will be announced in due course, FTSE Russell emphasized that it remains in active coordination with local market authorities.
“Further decisions regarding index treatment, including the potential resumption of full index ranking adjustments, will be considered ahead of the September 2026 review and communicated in due time,” FTSE noted.
Summary
FTSE Russell is rebalancing its Global Equity Index Series to address concerns over high shareholding concentration (HSC) within the Indonesian stock market. This policy aims to improve transparency and align with global standards by removing companies where a small group of stakeholders holds the majority of shares. Major Indonesian stocks, including PT Barito Renewables Energy Tbk (BREN) and PT Dian Swastatika Sentosa Tbk (DSSA), are currently at risk of exclusion due to these criteria.
To mitigate potential liquidity risks and market pressure for index-based investors, FTSE Russell plans to remove affected stocks at a zero value during the June 2026 index review. The firm is also deferring other index adjustments, such as IPO additions and full ranking updates, until at least September 2026. FTSE continues to work closely with local authorities to monitor the market and ensure the integrity of index replication throughout this transition period.
