The world-leading index provider MSCI said on Tuesday that it was no longer considering a public consultation on the potential exclusion of the MSCI Egypt index from its emerging markets index.
The most widely used equity index provider added in its results of the 2014 annual market classification review that its decision had followed the substantial increase in Egyptian foreign currency reserves.
Egypt’s Net International Reserves slightly dipped at the end of May, reaching $17.283 billion, the Central Bank of Egypt (CBE) announced on Thursday.
The drop represents the first fall in foreign reserves since January.
In June 2013, MSCI, whose indices are tracked by $7 trillion worldwide and $1.3 trillion in emerging markets alone, said fears about getting foreign currency out of Egypt due to the acute political conditions had deterred investors.
Accordingly the index provider's management might have been forced to launch a public consultation with the investment community on a potential exclusion of the MSCI Egypt Index from the MSCI Emerging Markets Index were the situation to worsen.
Launched in August 1997, MSCI Egypt is designed to measure the performance of the large and mid-cap segments of the Egyptian market with four constituents led by Commercial International Bank (CIB) and a market capital worth $8.2 billion. The index covers approximately 85 percent of Egypt's equity universe.
Meanwhile, MSCI said it would not add China's mainland-based A shares to its benchmark emerging markets index but the shares would remain on review for a possible move in 2015.
China, the world's largest emerging market, is already the biggest component of the MSCI emerging markets index.