Greece, relegated to emerging market by MSCI Inc. in November 2013, is in danger of losing even that status after shutting banks and closing its exchange.
MSCI may recategorize the MSCI Greece Index as a “standalone market,” according to a statement, which cited the introduction of prolonged restrictive measures that could lead to less market accessibility. The Athens Stock Exchange said on Monday its market would remain closed until July 6. MSCI will consult with investors before making any changes.
Countries such as Jamaica, Botswana, Zimbabwe and mainland China are standalone in MSCI’s view. They don’t meet minimum liquidity requirements, their markets are partially or fully closed to foreign investors, and stock lending or short selling are either not developed or prohibited, according to MSCI. Ukraine may become a standalone market, the index provider said in April.
MSCI said on June 19 it was monitoring developments in Greece and may reclassify its index tracking the nation’s shares. In 2013, Greece became the first developed nation to be cut to emerging-market status by MSCI.