MSCI Inc. proposed reclassifying Peru as a frontier market after a drop in liquidity left the country with too few actively traded stocks to be classified as an emerging market.
MSCI said in a statement it will consult investors on the change and announce the results Sept. 30. Phoenix-based Southern Copper Corp. could be moved from its Peru index to its USA indexes as part of the change, MSCI said.
Only three Peruvian securities meet the investability criteria of MSCI’s emerging-market category. As a smaller frontier market, eligible Peruvian stocks would need a 5 percent annualized trade value ratio, used to measure liquidity, compared with 15 percent for the emerging-market category.
Peru would follow Morocco, which was downgraded to a frontier market in 2013, according to MSCI’s website.