JPMorgan announced that it is possible to inject US$1 billion in capital in the event of a possible reclassification of Argentina in the MSCI.
Morgan Stanley Capital Investment (MSCI Inc.) is a company dedicated for more than 35 years to weighing and providing nearly 100,000 daily indexes on stocks, bonds, private equity funds, debt, stock marketshedge funds and other portfolio analysis tools worldwide.
The MSCI indices They are used as references in most markets and reflect the evolution of the value of listed companies by analysing the different risks and possible returns.
The importance of MSCI indices
Part of their importance lies in the fact that these indices are comparable with each other, since they are built on the same methodological bases. In addition, they are classified by country, region or sector. In 1968, Capital International began publishing indices covering the global stock market for non-U.S. markets.
In 1986, Morgan Stanley licensed the rights to Capital International’s indices and branded the indices as the Morgan Stanley Capital International (MSCI) indices. The company is headquartered in Tower 7 of the World Trade Center in Manhattan, New York. The MSCI Global Equity Indices have been published since 1969 and include the MSCI World and MSCI EAFE. Other important indices are the MSCI BRIC and MSCI Europe. Initially, the company used eight factors for their analyses: momentum, volatility, value, measure, growth, evolution, liquidity and financial leverage.
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How reclassification impacts Argentina
Its importance lies in the fact that these qualifications generate Strong changes in capital flows in the worldbecause thousands of asset funds and investors closely follow the members of these indexes to measure their performance and structure their investment portfolios.
Therefore, the reclassification that MSCI made of the Argentine marketwill not impact the destination of millions of dollars of investments financial. Following the turbulence that the country has suffered in recent months and the shortage of dollars, The arrival of foreign currency could play a key role in stabilising the exchange rate and reducing volatility.
In the long term, it would also allow expand the amount of financing and making it cheaper, both for the Government and private companies, a significant benefit for a financial market that is far from the potential that Argentina has according to its GDP.
Source: Ambito
