FTSE Group announces the results of the Annual Country Classification Review for 2014….
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The FTSE Country Classification Annual Review, carried out every September, is the process by which global equity markets are classified as Developed, Advanced Emerging, Secondary Emerging or Frontier within FTSE’s global indices.
FTSE Country Classification Changes 2014
FTSE confirms the following Country Classification changes for September 2014:
• Argentina will be demoted from Frontier
• Morocco will be demoted from Secondary Emerging to Frontier.
Argentina will be demoted from Frontier to unclassified market status due to continuing stringent capital controls imposed on international investors. Morocco will be demoted from Secondary Emerging to Frontier market status due to the continued decline in broad market liquidity below the level sufficient to support sizeable global investment. The demotion of Argentina from Frontier to unclassified market status and the demotion of Morocco from Secondary Emerging to Frontier market status will be implemented in conjunction with the June 2015 FTSE Global Equity Index Series quarterly review and the 2015 FTSE Frontier Index Series annual review.
FTSE Watch List 2014
In order to ensure that the potential, as well as confirmed, movement of markets between categories is completely transparent for investors, FTSE maintains a Watch List of markets being considered for promotion or demotion between the various market classifications.
The following changes to the Watch List have been confirmed at this review:
• Latvia will be added to the Watch List for possible addition to Frontier
• Palestine will be added to the Watch List for possible addition to Frontier
Latvia and Palestine will join the Watch List for possible addition to Frontier market status based on the markets meeting the five FTSE Quality of Markets criteria required for attaining Frontier status and will be considered for possible addition to Frontier market status at the next annual review in September 2015.
The markets on the Watch List as of September 2015 are therefore as follows:
• China ‘A’ Share: Possible inclusion as Secondary Emerging
• Greece: Possible demotion from Developed to Advanced Emerging
• Kazakhstan: Possible inclusion as Frontier
• Kuwait: Possible inclusion as Secondary Emerging
• Latvia: Possible inclusion as Frontier
• Mongolia: Possible inclusion as Frontier
• Palestine: Possible inclusion as Frontier
• Poland: Possible promotion from Advanced Emerging to Developed
• Qatar: Possible promotion from Frontier to Secondary Emerging
• Taiwan: Possible promotion from Advanced Emerging to Developed
China ‘A’ Shares, Greece, Kazakhstan, Kuwait, Mongolia, Poland, Qatar and Taiwan will remain on the Watch List. FTSE, supported by the Country Classification Committee, will continue to closely monitor the progress of all FTSE Watch List markets.
FTSE will provide a formal interim update in March 2015, the next Annual Review of the FTSE Watch List markets will take place in September 2015. FTSE will provide a minimum of six months notice prior to changes being implemented in its indices, as a result of a country classification review.