Greece became the first developed nation to be cut to emerging-market status by MSCI Inc, after the local stock index plunged 83 per cent since 2007.
Greece failed to meet criteria regarding securities borrowing and lending facilities, short selling and transferability, said MSCI, whose equity indexes are tracked by investors with about $7 trillion in assets. “It is unclear yet what the weight of the MSCI Greece will be on emerging markets, but in any case it will be significantly higher than that it has on developed markets”, Constantinos Zouzoulas, an analyst at Axia Ventures Group, a brokerage in Athens, wrote in a note. “This could be positive news for the Greek market as it could attract more interest, although there could be pressure in the short term."
Locked out of bond markets since April 2010, Greece accepted two European Union-led bailout packages as public opposition to pension and wage cuts derailed the pace of promised economic reforms. The ASE was the world’s second-worst performer since October 2007.
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