Morgan Stanley may reclassify Israel as a developed market, rather than an emerging market. The change would affect prominent indices tracked by many international mutual funds and investors.
HSBC Global Research has reviewed possible index changes in several widely used Morgan Stanley Capital International indices, including its Emerging Markets and Developed Markets classifications.
Israel, as well as Korea and Taiwan, may be reclassified from emerging to developed market status. They would potentially be replaced on the emerging markets index by UAE, Qatar, and Kuwait.
In September, FTSE announced that it would reclassify Israel as a developed market. The change will go into effect in June. Now it is possible that Morgan Stanley will follow suit.
Morgan Stanley Capital International is currently evaluating possible changes to its index components, a process which may last through June. HSBC notes that any proposed changes are "unlikely to become effective before the end of the year".
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2008
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