The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Indexing: The final frontier

This time last year – and the year before that – a great deal of discussion about Qatar concerned its likely ascent from the MSCI’s frontier index to its emerging markets index. Both Qatar and the UAE had been on MSCI’s watchlist for upgrade to the more senior index, and were widely expected to graduate.

Neither did. But they remain on the watchlist, so as we enter a new year, the debate will liven up again. Will 2013 be the year? And what’s the impact if it makes the step?

In terms of the impact, Euromoney reported in May 2011 estimates that Qatar would take up 62 to 100 basis points of the MSCI Emerging Market Index if included, equating to $2.5 billion to $4 billion of capital coming into Qatar based on the amount of institutional capital that tracks the index, even without counting the emerging markets funds that loosely track it. Those numbers still look about right today.

So what has to change for inclusion this time? MSCI is quite clear about it. "The issue around the very low foreign ownership limit levels imposed on Qatari companies is expected to be the only remaining impediment to the reclassification of the MSCI Qatar Index to Emerging Markets," MSCI says. "The MSCI Qatar Index should meet all requirements for inclusion in the MSCI Emerging Markets Index, provided the false trade mechanism recently introduced on the Qatar Exchange is successfully tested over time."

The foreign ownership limit is not something MSCI is going to budge on, as it is a big impediment for international institutional investors, limiting the number of shares available to them.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree