Krungsri Securities (KSS) wrote that MSCI’s decision to ‘pause’ its actions regarding Indonesia continues to support an active flow rotation into the Thai equity market, with a particular focus on mega-theme stocks that stand to benefit from accelerated investment within Thailand.
According to the latest update from MSCI on the transparency guidelines for shareholdings in Indonesian equities, several new regulatory measures have been introduced by Indonesian market authorities, including:
- Disclosure of shareholders with ownership exceeding 1%
- Classification of shareholder types
- Proposals for a framework to address high shareholding concentration (HSC)
- A roadmap to increase free float ratios to above 15%.
Despite these developments, MSCI has concluded to remain in a ‘wait and assess’ mode, extending its review period from May 2026 to June 2026. As a result, during the revision of the MSCI Global Standard Index in May 2026, the Indonesian equity market will still face potential ‘overhang,’ as MSCI will maintain a freeze mode for the time being.
Additional changes are being considered, such as incorporating the list of shareholders with greater than 1% holding into the free float calculation, which would effectively reduce the calculated free float included in the index. Stocks classified under HSC by Indonesian authorities are also set to be excluded from the index.
The pre-existing conditions remain unchanged: MSCI will continue to suspend increases in the Foreign Inclusion Factor (FIF) and the number of shares, refrain from adding Indonesian stocks to the MSCI Investable Market Index (IMI), and will not allow upgrades from Small Cap to Standard within Indonesian stocks.
According to Krungsri Securities, Thailand’s SET Index is expected to stand out in a comparative sense, particularly from the perspective of active fund rotation, due to the added constraints currently impacting Indonesia.
The Thai bourse displays high liquidity, making it well-suited to absorb foreign investment inflows. Its valuations remain low, while the equity risk premium ranks among the world’s top three. Notably, Thai equities remain under-owned, following significant foreign net selling between February 2023 and 2025 totaling approximately THB 465 billion.
Although there was a net inflow of about THB 58.8 billion in January and February 2026, there was a subsequent reduction in positioning due to war-related risk, with outflows of THB 37 billion.
Given these fundamentals, the focus remains on Thailand’s mega-theme stocks expected to serve as the primary investment targets for new capital inflows, with key beneficiaries anticipated to include GULF, PTT, ADVANC, and AOT.
