Citi says MSCI will most likely keep Indonesia in its emerging market classification, but may extend the index freeze into next year.

Analysts Ferry Wong, Lakshmi Rowter and others said in a research note: "Our base case is that MSCI will retain Indonesia's emerging market status at its November 11 review, but extend the freeze period to February 2027, with a full lifting of the freeze possibly falling in February or May 2027."

The report believes there is still tail risk of a downgrade to frontier market status, "but given that Indonesia has rolled out a number of broad reforms, we think the probability of this scenario is not high."

The report noted that the Indonesia Stock Exchange and the Central Securities Depository (KSEI) have significantly tightened rules related to high equity concentration, and publish monthly equity holding data covering 39 investor classifications.

The report believes the Jakarta Composite Index valuation is at "crisis-level" lows, but there is a lack of capital inflow catalysts before the November 11 result announcement.

It maintains a cautious view and recommends defensive names and exporters.