MSCI relegates Greece to emerging market status

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Leading index builder MSCI has relegated Greece from a developed market to an emerging market in its latest review.

In its annual classification review, the group decided to list the MSCI Greece Index as an emerging market as the country fails to qualify on several market accessibility criteria needed to be a developed market.

“The minimum standards that currently prevail in developed markets reflect continuous market improvements introduced by authorities in other countries over the years,” MSCI says.

“However, very few of these improved market practices have been reflected in the Greek market. This has led to Greece now failing to meet on multiple criteria: securities borrowing and lending facilities, short selling and transferability.”

It adds that measures introduced by the Greek authorities and the Athens Stock Exchange in 2008, such as in‐kind transfer and off‐exchange transaction‐like facilities, are reported to be “so restrictive that they are, in practice, unusable”.

Furthermore, the Greek equity market lacks well‐established stock lending and short selling practices, making it incompatible with its developed peers.

FE Analytics shows the MSCI Greece Index has dropped 85.5 per cent over the last five years – although it has posted a 57.5 per cent gain over the past 12 months.