Following MSCI Inc's warning last month, which dealt a heavy blow to the Indonesian stock market, FTSE Russell has become the latest index provider to express concerns about the investability of Indonesian equities.

According to a statement, the index compiler said it will postpone the index review originally scheduled for March due to poor trading volumes and uncertainties in determining public shareholding ratios. FTSE noted that Indonesian regulators have committed to enhancing the integrity and transparency of the capital market and stated it will closely monitor developments, providing updates in its June assessment report.

Last month, MSCI Inc issued a warning that it might reclassify Indonesia as a frontier market due to the high concentration of ownership in listed companies. FTSE Russell's decision further increases pressure on regulators to take action and restore confidence in an already fragile market. Concerns have also been heightened by the risk of a sovereign credit rating downgrade. In early trading on Tuesday, the benchmark Jakarta Composite Index rose by as much as 1%.

The Indonesian stock market remains weak.

This move "indeed raises the bar for Indonesian authorities to improve market structure," said an analyst at Aletheia Capital. "Now, with more attention on their solutions, they may need to allocate more resources."

Since last month's market slump, regulators have pledged to enhance transparency, including mandating that companies maintain a minimum free-float ratio of at least 15%, double the current level. They have also vowed to strengthen the disclosure of ownership structures. The aftermath of the incident has included the resignation of several senior officials from the stock exchange and regulatory bodies.

The Indonesia Stock Exchange stated that it met with FTSE on Monday; acting president Jeffrey Hendrik said in a text message that FTSE "supports" the action plan being implemented and noted that FTSE has not raised concerns about the country's classification.