The concepts in this paper have interesting implications for developing country capital markets in Latin America and Africa. They suggest a recognition of the importance of markets beyond BRICS.


Authors:  Dr. Nasser Saidi at DIFC Economics

Aathira Prasad

Vineeth Naik

Date:  January 2012

Abstract:  This paper discusses the possibility of the reclassification of certain frontier markets to emerging market status by the main index providers.  In addition, the paper assesses historical index upgrades to emerging market classification and concludes that, in some cases, index upgrades have caused country stock markets to outperform during the period after the initial announcement but prior to the actual inclusion of the country in the emerging market index.  This paper has particular ramifications for the equity markets of the UAE, Qatar, and Saudi Arabia, which may have the greatest current potential for upgrade to the MSCI Emerging Markets Index if liberalizing market reforms are continued in those countries.

Full Article:  From Frontier to Emerging: Does Market Reclassification Matter? (“Download This Paper”)

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