Greek stocks are set for net outflows following MSCI’s upgrade of the country to developed-market status, according to JPMorgan Chase & Co. The change, effective in May, will force emerging-market index trackers to sell Greek equities, triggering an estimated $5.1 billion in selling. Developed-market funds are expected to buy $4.8 billion, resulting in a net outflow of approximately $275 million. Pankaj Gupta, lead strategist at JPMorgan, noted the overall passive fund flow impact for Greece will be negative.
MSCI upgraded Greek stocks in March, marking a key milestone in the nation’s recovery from its debt crisis. The Athens Stock Exchange General Index has returned 246% since 2020, outperforming the Stoxx Europe 600 Index’s 94%. However, the index remains far below its 2007 peak.
Greece’s weight in the MSCI World Index will be just 0.06%, down from 0.61% in the MSCI EM Standard Index. Of the 10 Greek stocks in the emerging markets index, seven are expected to transition to the developed-market benchmark. The country’s weight in MSCI’s Europe and EAFE indexes is projected at 0.41% and 0.27%, respectively.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing