omniture

Annual Classification Changes to FTSE Global Equity Index Series

FTSE Group
2008-09-16 15:01 1685

-- South Korea to be Promoted to Developed Status;

-- Red Chip Stocks to be Moved From Hong Kong (Developed Market) to China

(Emerging Market);

-- Watch List Extended to Include Frontier Markets;

-- FTSE Updates on Assessment of Markets Will be Increased to Twice Each

Year.

SEOUL, HONG KONG, LONDON, and NEW YORK, Sept. 18 /Xinhua-PRNewswire/ -- Global index provider, FTSE Group ("FTSE") has completed its annual review of country classification for the FTSE Global Equity Index Series (GEIS) and releases its results today. Global equity markets are continually changing shape and structure in terms of breadth and complexity, so benchmarks must undergo regular review and restructuring to ensure that they reflect the investment opportunity available to global investors.

FTSE, working with an expert committee of independent market practitioners, reviews country classification on an annual basis in accordance with an advanced, transparent and consistent methodology. As a result of the 2008 review, the following changes will be implemented within the FTSE Global Equity Index Series in September 2009:

- South Korea will be promoted from Advanced Emerging to Developed status;

and

- Red Chip stocks, which are currently included in Hong Kong (a Developed market), will be moved to China (a Secondary Emerging market).

Mark Makepeace, Chief Executive, FTSE Group said, "Congratulations to South Korea on attaining promotion to Developed market status. FTSE would also like to congratulate Taiwan on the progress it has made in implementing market reforms over the last twelve months. We will continue working with the Taiwan authorities and market participants through our engagement programme, and hope to achieve the remaining reforms required by international investors."

FTSE publishes a Watch List of countries that it is actively monitoring for possible promotion and demotion between Developed, Advanced Emerging, Secondary Emerging and Frontier status. Arising from the September 2008 review of markets, the following new Watch List has been created:

Taiwan - Promotion to Developed status

Taiwan has substantially improved access to its market for foreign investors but no change will be made to its status at this time, Taiwan will remain on the Watch List and will be considered again in September 2009 for promotion to Developed market status from Advanced Emerging.

Greece - Demotion to Advanced Emerging status

Changes recently introduced by Greece to take into account the outstanding FTSE Quality of Markets criteria have yet to be fully adopted by the market. Greece will therefore remain a Developed market but will remain on the Watch List and be reviewed again in September 2009.

Argentina and Colombia - Demotion to Frontier status

Argentina and Colombia will be added to the Watch List and considered in September 2009 for possible demotion from Secondary Emerging to Frontier status.

Iceland - Inclusion as Advanced Emerging status

Iceland will be added to the Watch List and considered in September 2009 for possible inclusion the FTSE Global Equity Index Series as Advanced Emerging status.

China A Shares, Kuwait and United Arab Emirates - Inclusion as Secondary Emerging status

China A shares will remain on the Watch List, and Kuwait and the United Arab Emirates will be added to the Watch List. All three markets will be considered in September 2009 for possible inclusion in the FTSE Global Equity Index Series as Secondary Emerging status.

Kazakhstan, Malta and Ukraine - Inclusion as Frontier status

Following the introduction of the FTSE Frontier Markets Indices earlier in 2008, the Watch List will be extended to include Frontier Markets.

Kazakhstan, Malta and Ukraine will be added to the Watch List and considered in September 2009 for possible inclusion as Frontier status.

Additionally, Pakistan has been removed from the Watch List and will no longer be considered for possible demotion from Secondary Emerging to Frontier status.

In view of the size and significance of Saudi Arabia, a large Middle East market that does not currently meet the criteria for inclusion in the FTSE Global Equity Index Series, or for the Watch List, FTSE will introduce a stand alone index for this market for those international investors wishing to add Saudi Arabia to their global portfolios.

Tim Batho, Head, ipac Investment Services, said, "FTSE has developed a transparent and consistent approach which helps investors manage change. The extension of this process to include Frontier markets captures new growth markets and is a welcome new element within FTSE's country classification process."

FTSE will engage with representatives of the markets on the Watch List on an ongoing basis over the next twelve months, to explain the criteria required, to discuss any changes in market practice and to assist these markets in communicating progress back to the international investment community.

Robert Barnes, Managing Director, Equities, UBS Investment Bank added, "The results of this year's country classification review demonstrate that real benefits can be derived from the engagement process for both investors and markets operators."

For full information about the country classification process, including details of all criteria for Developed, Emerging and Frontier status, along with an assessment of each of the 63 markets classified in FTSE equity indices, please visit http://www.ftse.com/country

Notes to Editors

About FTSE Group

FTSE Group is a world-leader in the creation and management of indexes. With offices in Beijing, London, Frankfurt, Hong Kong, Madrid, Paris, New York, San Francisco, Boston, Shanghai and Tokyo, FTSE Group services clients in 77 countries worldwide. It calculates and manages the FTSE Global Equity Index Series, which includes world-recognized indexes ranging from the FTSE All-World Index, the FTSE4Good series and the FTSEurofirst Index series, as well as domestic indexes such as the prestigious FTSE 100. The company has collaborative arrangements with the Athens, Cyprus, Euronext, Johannesburg London, Madrid, NASDAQ and Taiwan exchanges, as well as Nomura Securities, and Xinhua Finance of China.

Source: FTSE Group
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