Qatar & UAE: still waiting for MSCI | beyondbrics – FT.com

Qatar may have snagged the World Cup and even post-crash Dubai is overrun with Wall Streeters, but the countries’ equity markets don’t even rank as emerging – MSCI, the influential index provider, still classifies them as frontier markets, alongside countries such as Serbia, Lebanon and Pakistan.

MSCI, whose indices are tracked by funds worth billions of dollars, will announce in June whether Qatar and the UAE’s bourses will qualify for its Emerging Markets index. But by the looks of it, investors are not optimistic that the countries will make the cut.

Investors have been left cold as they consider rising political risk in the region and still-restrictive caps on foreign investment in the two countries. And while the UAE and Qatar recently announced an improved settlement system for trades, as MSCI had recommended last June when the indexer decided to continue classifying the markets as frontier, brokers point out that the new system will be implemented just a blink before the MSCI’s announcement.

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