Egypt and Pakistan are awaiting the fate of their emerging market classifications

March 28, 2024

In parallel, the ratings affect the direction of investment of $15.9 trillion in funds that track the company’s indices, especially in emerging and frontier markets.

Egypt was facing its worst economic crisis in decades when FTSE Russell said last year that it was considering downgrading the country’s stock market, citing complaints about delays in capital transfers.

Since then, the country has received rescue packages worth more than $57 billion from the UAE, the International Monetary Fund and the European Union. Foreign inflows, combined with currency devaluation and higher interest rates, removed pressures on the country’s reserves, paving the way for smoother capital transfers.

For its part, the biggest problem Pakistan has faced since 2017 has been the continued erosion in market size. However, the country has begun to witness a recovery since September, with the market adding about $11 billion in shareholder wealth. FTSE Russell will examine whether Pakistani stock prices have risen again above the minimum market size it uses for continued emerging market classification. (Bloomberg)

Source:
Bloomberg

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