Thailand’s main equity index advanced to its highest mark since November 2024, gaining up to 1.2% during the morning session on Thursday. The rally followed a strategic shift by asset manager GMO, which is increasing exposure to Thai stocks while reducing its holdings in Indonesia in response to potential MSCI reclassification risks.
Investor sentiment toward Thailand strengthened as Grantham Mayo Van Otterloo & Co. (GMO), according to a report from Bloomberg, redirected investments away from Indonesian equities. The move came after MSCI issued a notice that Indonesia may be moved to frontier market status unless transparency in shareholdings is improved. Indonesia has been given a deadline in May to demonstrate regulatory reforms that could safeguard its market standing.
Meanwhile, GMO identified Thailand as a preferred market, citing the recent election victory of Prime Minister Anutin Charnvirakul, which is expected to ensure governmental stability. As a result, Thai shares now represent one of the firm’s largest overweight positions globally.
FTSE Russell has followed the same step as MSCI and decided to postpone its review and rebalancing of Indonesian stocks, which was originally scheduled for March 2026. The decision serves as a stability buffer while the domestic market undergoes reforms to trading regulations and share ownership structures.
The decision by FTSE Russell to postpone the review of Indonesian stocks is primarily driven by uncertainty surrounding the calculation of public shares, or “free float,” for domestic issuers. This move serves as a stability buffer intended to prevent potential market disruptions and detrimental turnover in trading activity while the domestic market implements infrastructure overhauls and reforms to trading regulations. These ongoing reforms include adjustments to minimum free float requirements to align with global standards and address transparency issues.
Additionally, the postponement reflects feedback from an external advisory committee and mirrors a recent decision by MSCI, which was prompted by concerns over share ownership structures and insufficiently transparent price formation.
