Treatment of Greece in MSCI Indices in case of exit from EMU

MSCI answers some commonly asked questions regarding the treatment of Greece in the MSCI Indices following a potential exit of the country from the eurozone.

The content of this Q&A (for link, see below) is based on information available at May 29, 2012. Of course, the answers are subject to change due to potential future developments related to the event.

MSCI considers two illustrative scenarios: an orderly and well planned exit of Greece from the eurozone coinciding with the introduction of a new currency, under which market participants are unlikely to face any major disruptions, and a disorderly exit of the country from the eurozone, resulting in major market disruptions and an unpredictable implementation timeline.

The real course of events may fall anywhere in between these two extreme scenarios. These scenarios are hypothetical and were created for illustrative purposes only and should not be viewed as forecasts.

Currently, Greece is classified in Developed Markets and is included in the MSCI EMU Index, which includes all countries in Developed Markets that are part of the European Monetary Union.

Following the May Semi Annual Index Review, the MSCI Greece Index will have two constituents and a weight of 0.09% in the MSCI Europe Index. The MSCI Greece IMI Index, which includes large, mid and small cap securities, will have 25 constituents.

Orderly scenario

The case of an orderly exit of Greece from the eurozone would be similar to the introduction of a new currency by a given country, such as the introduction of the New Turkish Lira in January 2005 in the MSCI Turkey Index.

In such a scenario, the Athens Stock Exchange would be expected to issue an effective date starting from which the securities would be quoted in the new currency, following the official announcement from Greek authorities confirming the exit of Greece from the eurozone.

The date of introduction of the new currency in the MSCI Indices would coincide with this official effective date.

Detailed information on the MSCI product files as well as the final decisions on the treatment of the Greek equity market in the MSCI Indices would be provided within five days following the official announcement of the event by the Greek authorities. Greek securities would be excluded from the MSCI EMU Index. 

Close Window
View the Magazine

You need to fill all required fields!