Morgan Stanley Capital International – MSCI inc., a leading provider of indexes and other investment decision support tools worldwide, has announced that it is no longer considering launching a public consultation on a potential exclusion of the MSCI Egypt Index from the MSCI Emerging Markets Index according to Reuters.
MSCI added, in its annual market classification review for 2014, that it was due to the substantial increase in Egyptian foreign currency reserves.
In a study last April, EFG Hermes said that Egypt is less likely to be downgraded from MSCI emerging Market status, after the backlog of foreign investor funds awaiting repatriation was cleared on 1 April 2014.
EFG Hermes stated that some foreign institutional investors will view the market more favorably, they have been net buyers of Egyptian equities since half of the backlog was cleared on 13 March, However, EFG Hermes said that a fully recovery in foreign appetite seems unlikely soon.
MSCI conducts an annual review of all countries included in the MSCI indexes to ensure that they continue to reflect the standards of the underlying market classification. Results of annual reviews are announced each June.