American Weighting MSCI announced that next June 24 will specify your annual meeting in which you could Ascend to Argentina of “Independent Market” (“Standalone Market”) to “Border Market” (“Frontier Market”) or even “Emerging Market” (“Emerging Market”). At best, could enter a great flow of abroad capitals that would boost local financial assets.
“What they basically do is qualify or give a rating of investment to each of the countries according to how easy or how safe it is to invest in each of them, obviously taking into account politics, economy and stability for access to investments and others,” he explained Ian ColomboFinancial Advisor in Cocos Gold.
In 2021, Argentina was degraded until they are located next to nations such as Bosnia, Bulgaria, Malta, Ukraine, Botsuana, Zimbabue, Lebanon, Palestine, Jamaica and Panama for the various risks that started in 2019. Consequently, from that moment, Millions of dollars of different investors and institutional funds cannot be turned into Argentine financial assets.
“Currently, Argentina is still qualified as ‘standalone’ for global investment funds, which means that we are not included in the rates of Latin America or emerging countries. So, by statute, large investment funds cannot have Argentina in their portfolios,” he said Pedro Moreyradirector of Guardian Capital.
Border market: an intermediate road
However, fortunately, Soon I could be together with Brazil, Chile, Colombia, Mexico, Peru, China, India, Indonesia and other emerging marketsbut after sharing stay with sites such as Slovenia, Pakistan, Vietnam, Morocco, Croatia in the border range.
According Ignacio SniechowskiHead of Research of IEB GroupArgentina would not be reclassified directly to an emerging market as happened during the administration of Mauricio Macri for two reasons.
“The first is a time effect: the non -total survey of exchange restrictions occurred in April of this year, while during the Macri administration it had been carried out immediately after the assumption, in December 2016. For MSCI, the irreversibility of the changes is an important factor and, we believe, that a triumph in the mid -term elections would further solidify the will of a change in Argentina”he commented Sniechowski.
And he added: “The second factor is that of accessibility: While the advance in the elimination of exchange restrictions was enormous, they were not eliminated in their entirety in regard to legal persons. ”
Greater demand for actions
In any case, the border market update would be very positive: as many investors will be advanced and will begin to discount an eventual arrival in the emerging market category, there will be a greater demandespecially for large oil actions (YPF, Pampa Energía and Vista Energy) AND FIRST LINE BANKS (Galicia Financial Group, Macro Banco and Grupo Supervielle).
“Clearly, it is very good if Argentina passes from the room to the third level. A large amount of capital could enter, since we would be on the radar of the world’s investment banks. Investments are expected to enter the main companies in Argentina,” said Colombo.
“A MSCI reclassification would generate that several major investment funds, indexes and ETFs that seek to replicate yields or represent Latin America or emerging have to add Argentine assets in their portfolios,” said Moreyra.
Source: Ambito
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