June 24 (Reuters) - Index provider MSCI ( MSCI ) has extended a

review into transparency in Indonesia's equity market, staving

off - for now - a downgrade to frontier market status but

offering little longer-run relief for this year's

worst-performing major stock market.

The Jakarta Composite index was flat in early trade

in response, with loses of about 30% year-to-date after MSCI ( MSCI )

threatened a downgrade in January over opacity in ownership and

trade flow in the market and limited free float even in larger

cap stocks.

The market's MSCI ( MSCI ) classification is important because it

dictates billions of dollars in passive investment allocation.

Here are investor and analyst responses to the MSCI ( MSCI ) review:

NIRGUNAN TIRUCHELVAM, HEAD OF CONSUMER AND INTERNET AT

ALETHEIA CAPITAL, SINGAPORE:

"The tone of the MSCI ( MSCI ) statement suggests that the chances of

a downgrade to frontier classification remain relatively high."

"We were counting on a 50/50 chance of a downgrade that

continues to be our core expectation, but there needs to be a

concerted effort by the Indonesian authorities to address some

of the transparency and concentration risks that the MSCI ( MSCI ) has

flagged in this statement and in previous statements."

GARY TAN, PORTFOLIO MANAGER, ALLSPRING GLOBAL INVESTMENTS,

SINGAPORE:

"The outcome was in line with market expectations, with the

tone of MSCI's ( MSCI ) statement more cautionary than outright negative

in our view."

"What stood out is the clear shift toward implementation and

measurable outcomes, signalling that announced reforms alone are

not sufficient. The extension of the review to November keeps

pressure on regulators and effectively kicks the decision down

the road. In the interim, we expect investor focus to shift

toward currency stability and policy credibility, with the

trajectory of the rupiah a key barometer of progress as the

government works to restore confidence."

TAN ALTUNDAG, INVESTMENT MANAGER, EMERGING MARKET EQUITIES,

PICTET ASSET MANAGEMENT, HONG KONG:

"Retaining EM status preserves Indonesia's access to the

broadest institutional investor base and removes the immediate

forced-selling threat. It gives regulators the runway to deliver

on the reforms pledged to MSCI ( MSCI ) - though Indonesia remains under

active watch. Staying in the investable universe for a broader

investor audience is meaningful, but it does not automatically

restore confidence or reverse outflows."

"This is not a clear-cut recovery narrative, and the bar for

re-engagement remains high. Beyond the MSCI ( MSCI ) decision itself,

investors will focus on regulatory follow-through and policy

credibility as the most tangible proxies for improved governance

direction."