The index provider has held both indices under review since announcing it may upgrade them in 2010. However, it said that, in order to give additional time for market participants to assess the impact of recent enhancements implemented on both markets, it has delayed any upgrade.
MSCI said these enhancements include new security purchasing models on the Qatari Exchange, Dubai Financial Market and Abu Dhabi Securities Exchange in May this year.
However, the MSCI also warned that international investors had also raised concerns about the effect of stringent foreign ownership limits which leave limited availability of shares to foreign investors. MSCI said this had been point had been most strongly voiced for the Qatari market as large companies, such as Industries Qatar, have almost reached their foreign ownership limit to become “quasi-uninvestable” for foreign investors. MSCI said under these current conditions, the MSCI Qatar Index would not qualify for an upgrade to emerging market status.
Meanwhile, the MSCI has also decided not to upgrade either the MSCI Korea or MSCI Taiwan indices from emerging market status to developed market. The company said both indices would remain under review.