MSCI Group (Morgan Stanley Capital International) warned it would downgrade the Athens Stock Exchange to the level of an emerging market. If this happens it will be a precedent in which the market of a European Union country for the first time will be cut to a developing economy. Following the collapse of the capitalization in the Greek financial market, the local MSCI Greece Index (MXGR) includes the shares of only two companies – 3E Coca Cola and the state lottery OPAP.
Stock valuations of the index have been declining and are getting closer to the levels of emerging markets. Financial experts noted that MSCI Greece index has lost 93% in the past five years. "The market has already made up its mind about Greek equities. MSCI is simply making it inevitable. In a sense they really need a new category – blown-up developed markets," the chairman of Marketfield Asset Management Michael Shaoul said for Businessweek.
In this regard, To Vima reported that Morgan Stanley will most probably hold a public consultation on the creation of a special category for the case of Greece. The report by the investment giant MSCI stressed that the Greek authorities had not taken into account the repeated remarks of the international investment community about the market functioning and failed to align the necessary rules and practices with the evolving standards of developed countries. MSCI rated the Athens Stock Exchange as a developed financial market in 2001, when the country entered the euro area and its downgrading within the monetary union will be a precedent.
Meanwhile, after it became clear that the new Greek government will take oath at 7 pm on Thursday, the Athens Stock Exchange climbed again. Minutes before 4 pm, the main index rose by 1.54% and the turnover reached almost 45 million.