MSCI (NYSE: MSCI), the index provider that lends its name to scores of ETFs, particularly in the emerging markets arena, is expected to announce its widely anticipated market reclassification this evening at around 5 PM Eastern time, news that could mean big things for the iShares MSCI Emerging Markets Index Fund (NYSE: EEM [FREE Stock Trend Analysis]) and its larger rival, the Vanguard MSCI Emerging Markets ETF (NYSE: VWO).
As we recently noted, South Korea and Taiwan are two prime candidates to make the leap to developed market, while Qatar and the United Arab Emirates could jump to emerging markets status from frontier market, according to Tim Seymour.
If both South Korea and Taiwan get a promotion, EEM and VWO will have some sizable gaps to fill as those two countries account for over 26% of both ETFs' country weights. Not only that, since South Korea and Taiwan are cash markets, a taxable distribution would be created to EEM and VWO shareholders since the ETFs would have to sell Korean and Taiwanese stocks and replace them with other fare.
DFM and Abu Dhabi rejected for emerging status.
ReplyDeleteNow we know MSCI is not a joke organisation. That, or their's is a very high price?
But really.... What if MSCI did give the markets their holy grail? What could a few billion dollars do for stock prices here?
The kids at Dubai Share Talk really ought to remember just how insignificant this money is compared to what was thrown at the market even as recently as 3 years ago.....
I was dismayed listening to the "ignorance" on display from radio presenters and commentators with regards the whole process.
ReplyDeleteNow we have Nasdaq Dubai CEO pumping up the story, well he seems to forget his bourse is one of the few to actually have companies leave, having been oversold by him and his team.
Time for all three UAE bourses to merge.