— China A-shares remain on Watch List for future inclusion as a Secondary Emerging market
— Argentina, Nigeria and Romania join Watch List for possible reclassification
— FTSE Russell provides progress update on current Watch List countries Poland, Kuwait, Saudi Arabia, Kazakhstan & Mongolia
FTSE Russell, the global index and data provider, today announces the results of the FTSE Annual Country Classification Review for 2016. FTSE Russell formally reviews country classifications within its FTSE Global Equity Index Series (FTSE GEIS) each September using a comprehensive, transparent and consistent methodology. This annual review incorporates ongoing country classification research and feedback from the independent FTSE Russell external advisory committees to designate markets as Developed, Advanced Emerging, Secondary Emerging or Frontier.
Following the September 2016 annual review, FTSE Russell confirms the following:
- China A-shares remain on FTSE Watch List for possible inclusion as a Secondary Emerging market.
- Argentina, currently “unclassified,” is being considered for inclusion as a Frontier market.
- Nigeria, currently a Frontier market, is being considered for possible reclassification to “unclassified.”
- Romania, currently a Frontier market, is being considered as a Secondary Emerging market.
Mark Makepeace, Chief Executive Officer of FTSE Russell, commented:
“China is making very good progress toward opening its domestic A share market to foreign investors, but our market consultations show continuing concerns around restrictive capital controls, high levels of stock suspensions and market interventions. We expect to see growing use of our FTSE Global China A Inclusion Indexes prior to China A-shares entering our core global benchmarks.”
In May 2015, FTSE Russell introduced the FTSE Global China A Inclusion Indexes as a transitional tool for investors in preparation for the eventual inclusion of China A-shares in its widely followed global benchmarks.
FTSE Russell has also issued a progress report on countries currently on the FTSE Watch List retaining their current classification. These include Poland, Kuwait, Saudi Arabia, Kazakhstan and Mongolia. In addition, FTSE Russell continues to monitor Egypt and will provide a progress report in the March 2017 FTSE Country Classification Interim Update.
FTSE Watch List 2016
In order to ensure that the movement of countries between classifications is completely transparent to market participants, FTSE Russell maintains a Watch List of markets being considered for change between the various market classifications. The September 2016 FTSE Watch List is as follows:
- Argentina – possible inclusion as a Frontier market
- China A-shares – possible inclusion as a Secondary Emerging market
- Kazakhstan – possible inclusion as a Frontier market
- Kuwait – possible inclusion as a Secondary Emerging market
- Mongolia – possible inclusion as a Frontier market
- Nigeria – possible reclassification from Frontier to a Standalone (“unclassified) market
- Poland – possible reclassification from Advanced Emerging to a Developed market
- Romania – possible reclassification from Frontier to a Secondary Emerging market
- Saudi Arabia – possible inclusion as a Secondary Emerging market
Chris Woods, Chairman of the Governance Board at FTSE Russell, commented:
“The FTSE Annual Country Classification Review is a critical part of maintaining the integrity and market representation of our global indexes. It is a fully transparent and open process which relies on the insight and rigor of our global research team working in concert with exchanges, market participants, regulatory bodies and clients. Our strong governance is a hallmark of our offering as a leading global index provider.”
FTSE Russell will provide a formal interim update in March 2017 and the next annual review of the FTSE Watch List markets will take place in September 2017. FTSE Russell provides a minimum of six months’ notice prior to changes being implemented in its indexes.
For more information please visit our Country Classification page.
– Ends –
For further information:
Ed Clark, +44 (0)20 7797 1222
Tim Benedict, +1 212 314 1220
Hong Kong: Fennie Wong, +852 2164 3267
Sydney: Laura McCrackle, +61 2 8823 3526
Notes to editors:
About FTSE Russell:
FTSE Russell is a leading global provider creating and managing a wide range of indexes, data and analytic solutions to meet client needs across asset classes, style and strategies. Covering 98% of the investable market, FTSE Russell indexes offer a true picture of global markets, combined with the specialist knowledge gained from developing local benchmarks around the world.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. More than $15 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create investment funds, ETFs, structured products and index-based derivatives. FTSE Russell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on index innovation and customer partnership applying the highest industry standards and embracing the IOSCO Principles. FTSE Russell is wholly owned by the London Stock Exchange Group.
For more information, visit www.ftserussell.com.
© 2016 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”) and (4) MTSNext Limited (“MTSNext”). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, or FTSE TMX.
All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the Indexes for any particular purpose to which they might be put.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this communication should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/or their respective licensors.