These days a initials that appears every so often in the financial media: MSCI. Every time this public index reviews, analysts and operators grab the hair. Some get excited, others frustrated, but Do we really know what the MSCI is and what does it mean for Argentina to be (or not) in its lists?
MSCIacronyms of Morgan Stanley Capital Internationalit is a company that produces global financial indices. It is not the only one, nor the most important on all fronts, but it is very influential, especially in what has to do with Actions (What is called Variable rent either Equity). This company groups countries in different categories: developed, emerging, of border and Standalone (which would be something like “outside the map”).
Where is Argentina? Since 2021 we are in the last category, Standalone. The latter can be translated as a kind of limbo, without clear classification because there are no comparable, “We are particular”. Be Standalone It means that we do not meet certain basic requirements such as having a transparent financial market and free access to foreign capital (not even).
It is one Technical issue: MSCI needs to know if an investment fund, from anywhere in the world, can operate in your market without too many complications. In the case of Argentina, for now the answer is no.
Now, Why does it matter so much whether or not we are in that index?
Because many international funds (especially liabilities, such as ETFs) are armed to Replicate the behavior of these indices. If a country enters these indices, these funds have to buy shares of companies in that country to replicate the behavior. This can generate a significant income income.
Now, we can think of the latter as a positive driver, But recent history shows something interesting. In 2018when MSCI ascended us to emerging market Thanks to some reforms from the Macri government, Merval had a small rise … but at the same time, That year the Macri rally was over. The party lasted little, and not because MSCI has “betrayed” us, but because What really matters is how the situation is and future perspectives, Not the poster that hangs us from outside.
The story It is repeated, and if it does not, It looks a lot like. We saw the same in 2021something similar to 2018 but vice versa. MSCI degraded us to Standaloneand many grabbed their heads. However, since then The Merval It was one of the rates of actions that rose the most in the world. Conclusion? What goes up or down does not depend so much on the news of the MSCI, but on the foundations.
This weekMSCI again confirmed that Argentina continues outside the emerging index And neither does it (at least for now) on the list of candidates to be border. Maybe in 2026 we can be evaluated again. Meanwhile, we continue where we are. Should we worry? Not so much.
First, because The MSCI is only one of several indices. For example, in the world of bonds (sovereign debt), JP Morgan considers us emerging market Within its EMBI, which is the most often in that segment index. I mean, We can be emerging for some and standalone for othersdepending on the type of asset.
Second, because markets do not move only for labels. Capital enters when there is confidence, predictability and profit opportunities. If Argentina improves its institutional situation, reduces exchange restrictions and offers reasonable growth perspectives, Investors will come beyond what MSCI says.
It is important to remember that There are news that generate volatility and those that change trends.
MSCI can move the needle in the short term. The evidence shows that when we speculate that we could be reclassified, some buy actions waiting for that flow of money. But when the news is concretized (or not), enthusiasm cools. That is why in some cases “It is purchased with expectations, but it is sold with confirmation”.
In short, the MSCI It is important, but It is not the oracle. Its influence is real, especially for certain institutional funds, but The true engine of the Argentine market will always be structural and institutional improvement. Achieve a more stable environment, less obstacles, clearer rules, where property rights and there are legal certainty. That is worth more than any classification.
Source: Ambito
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