MSCI’s decision will not only affect Argentina’s credit classification, but also will have a direct impact on the price of local actions.
This Tuesday is a key day for the Argentine market, since the company MSCI, that reference indices for global funds will elaborate, will announce its decision on the Credit Category of Argentina. Since 2021, the country has been listed as “Standalone” (Independent), a category that shares with other markets such as Jamaica, Panama, Trinidad and Tobago, Bulgaria, Palestine and Ukraine. This classification implies that Argentine actions evaluated by MSCI are not included in emerging or border market rates, which limits the investment of international funds that seek to replicate these indices.
The possible reclassification of Argentina to the category of “border market” could have a significant impact on the price of local shares. In this category, Argentina would share space with nations such as Pakistan, Vietnam, Serbia and Slovenia, which could attract more international funds willing to invest in local assets. MSCI’s decision will be announced this afternoon and has generated great expectation in the market.
The historical context of the classification of Argentina
Argentina had managed to return to the emerging market category in June 2018, during the Government of Mauricio Macri, after the opening of the exchange rate. However, in June 2021, the Argentine MSCI fell to the “Standalone” category due to the restraint of the stocks to the dollar and the default of the debt during 2019. This setback has been a hard blow for the local shareholding market, limiting investment opportunities and the flow of international capital.
President Javier Milei has expressed his optimism about the country’s credit future, stating that “we will achieve, sooner or later, to be an emerging country again in credit rating.” This vision reflects the hope that the ongoing economic and financial reforms can improve the perception of risk of Argentina in the global market.
Barriers and opportunities for investors
Despite recent advances, such as the elimination of several restrictions by the Argentine Central Bank in April 2025, which allow international investors to repatriate dividends generated since January 1, 2025, significant barriers still persist for foreign institutional investors. MSCI has recognized Argentina as a “potential candidate” to reclassification, although it has stressed that the market remains “currently or totally closed to foreign investors.”
The possible reclassification to “border market” would be an important step for Argentina, since it could open the doors to a greater foreign investment and improve the liquidity of the local share market. However, there is still a long way to go to recover the emerging market category, which would allow Argentina to attract an even greater volume of investments and consolidate its position in the global market.
Potential impact on the shareholding market
MSCI’s decision will not only affect Argentina’s credit classification, but also will have a direct impact on the price of local actions. Positive reclassification could generate an increase in the demand for Argentine actions by international funds, which in turn could boost prices and improve market liquidity. On the other hand, if MSCI decides to keep Argentina in the “Standalone” category, the market could face greater pressure and limitations in terms of foreign investment.
In conclusion, MSCI’s decision is a crucial milestone for the Argentine shareholding market. Regardless of the result, it is important that the country continue to advance in the necessary reforms to improve its attractiveness as an investment destination and recover its position in the global market. The expectation is set out that, over time and appropriate efforts, Argentina can be considered again an emerging market, thus attracting higher capital flows and economic growth opportunities.
Source: Ambito
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