MSCI Upgrades Pakistan, to Review Argentina
On Tuesday June 14th, MSCI announced the MSCI Pakistan Index will be reclassified to Emerging Markets status from Frontier Market status. MSCI also announced that it is adding the MSCI Argentina Index to the review list for a potential reclassification to Emerging Markets status as part of the 2017 Annual Market Classification Review. Both indexes had previously been downgraded to Frontier Market status during the financial crisis over seven years ago, but have since taken meaningful steps to strengthen their economies and financial markets.
Although Pakistan was hurt by the financial crisis and has been mired by geopolitical issues, its long term growth has remained robust, averaging 4.2% annual GDP growth over the past 15 years. Looking forward, the country is well positioned to maintain its strong growth trajectory with favorable demographics- 54% of Pakistan’s population is under the age of 25- and significant infrastructure investment, having agreed to a $46 billion deal with China to develop a new economic corridor1. MSCI’s upgrade of Pakistan to an Emerging Market is evidence the international investment community has taken notice of Pakistan and represents a major milestone in the nation’s growth trajectory. The Global X MSCI Pakistan ETF (PAK) is the only US-listed ETF with dedicated exposure to Pakistani stocks2.
Since Argentina’s President Mauricio Macri’s election in late-2015, South America’s second largest economy has undergone substantial reforms in an effort to return to sustainable growth. Macri has quickly sought to tackle issues such as high inflation, unsustainable fiscal policies, and isolation from global capital markets. He has done so by abolishing protective tariffs and quotas, removing capital controls to allow the currency to float freely, and worked with international creditors to settle outstanding debts. The Global X MSCI Argentina ETF (ARGT) is the only US-listed ETF to provide targeted exposure to Argentinian equities3. ARGT has seen nearly $50 million in net inflows4 over the past year as sentiment and investment interest in Argentina continues to rise.