CAIRO: MSCI Inc., the leading provider of indexes and other investment decision support tools worldwide, announced late Tuesday that it is no longer considering launching a public consultation on a potential exclusion of the MSCI Egypt Index from the MSCI Emerging Markets Index.
In its Annual Market Classification Review for 2014, MSCI stated that the decision followed a substantial increase in the country’s foreign currency reserves since the beginning of the year.
MSCI had announced in 2013 its intention to put EGX up for a review to be excluded from the index of emerging markets, citing the uncertainty of the exchange rate and the flow of transfer of foreign investments, according to a Wednesday statement from the Exchange.
“The decision will likely boost the confidence of investors in the market, especially foreigners, which will reflect positively on traded values and volumes over the coming period,” said Mohammed Omran, Chairman of EGX.
“The Central Bank of Egypt (CBE) has cleared of the backlog of dollars owed to foreign investors seeking to repatriate funds from the country. Based on current information, no new shortage of foreign currency has been reported or expected to occur in the short-term,” added the MSCI report posted on its website.
Omran added that CBE’s recent decisions that facilitated the exit of foreign investors from EGX, was the main incentive to MSCI to exclude EGX from the review list, according to EGX statement.
The index provider also maintained South Korea and Taiwan indexes in the emerging markets classification.