MSCI has “no intention” of removing Egypt’s stock exchange from its index of emerging markets, a representative of the firm said during a meeting with the latter on Sunday.
The discussions came following an announcement last week that the firm may be forced to remove the index from its emerging market index. Sebastien Lieblich, vice-president of index research, stated that the company was monitoring events in Egypt closely, however refuted claims that they are currently reassessing and reviewing their list of indicators regarding the country’s status as an emerging market.
These statements came in response to questions asked by the president of Egypt’s stock exchange during a meeting held in the latter’s executive office. During the meeting, the president asked that MSCI, a subsidiary of the financial services firm Morgan Stanley, provide clarification and calm the fears of foreign investors regarding the potential for Egypt to be downgraded from MSCI’s list of emerging markets.
While Lieblich affirmed that MSCI had no plans to do so, he also pointed out that the company was monitoring the freedom with which foreign investors were able to operate within the country’s exchange, and the ease with which they are able to pull out and retrieve their funds. This applied in particular to those investors who have been operating on the exchange for long periods of time. He stated however that in the event that negative developments do occur within the stock market, that the company may take to consulting with investors and international financial institutions regarding the status of Egypt’s financial market and whether or not to alter the country’s status as an “emerging market”.
He added that the method by which Egypt’s Central Bank has distributed hard currency to foreign investors differentiated between those who had been operating within the country for long periods of time and those who had just entered the market. He added that new investors for the most part did not experience problems within Egypt’s banking sector, but that those who have been operating within the country for long periods of time had encountered difficulties in pulling out their investments and retrieving their reserves of hard foreign currency.
MSCI further called on Egypt to take measures to solidify and strengthen its position as an emerging market, welcoming any new ideas and suggestions made regarding the issue, calling for continued mutual cooperation between the two sides in the future.
Translated from Al-Borsa
