FTSE Announces 2010 Country Classification Changes - Czech Republic, Malaysia And Turkey Promoted To Advanced Emerging Markets

FTSE Group (“FTSE”), the award winning global index provider, today announces the results of its 2010 Country Classification Annual Review.

The FTSE Country Classification Annual Review, carried out every September, is the process by which global equity markets are classified as Developed, Advanced Emerging, Secondary Emerging or Frontier within the FTSE Global Equity Index Series.

Working with independent practitioner committees, made up of senior industry experts and index users, FTSE has designed a sophisticated approach for determining the investability status of global markets. Using this approach, global markets which meet the economic conditions of a developed or emerging economy are measured against the ‘Quality of Markets Assessment’ criteria developed in consultation with the investment community (Details of the criteria are available at www.ftse.com/country). This is further supported by an in-depth engagement programme with the markets being assessed within the Global Equity Index Series. As a result, the FTSE Country Classification methodology provides a transparent and consistent assessment of the markets of over 70 countries with respect to the quality of their investment infrastructure for international investors.

As a result of the 2010 annual review, the FTSE Policy Group has approved the following changes:

• Czech Republic – Promoted from Secondary Emerging to Advanced Emerging;
• Malaysia – Promoted from Secondary Emerging to Advanced Emerging; and
• Turkey – Promoted from Secondary Emerging to Advanced Emerging

FTSE Global Equity Index Series Country Classification from June 2011

FTSE anticipates that from 2012 onwards, future country classification changes will be implemented at the same time as the relevant annual index reviews of each affected market.

FTSE also maintains a Watch List of countries that are being considered for promotion or demotion between the various market classifications. Following this year’s review, Ghana and Thailand will join the Watch List for promotion to Frontier and Advanced Emerging markets respectively. China “A” shares, Colombia, Greece, Kazakhstan, Kuwait and Taiwan will remain on the Watch List and will be reviewed again in September 2011.

FTSE 2010 Watch List

• China “A” Share – Possible inclusion as Secondary Emerging;
• Colombia – Possible move from Secondary Emerging to Frontier;
• Ghana – Possible inclusion as Frontier;
• Greece – Possible move from Developed to Advanced Emerging;
• Kazakhstan – Possible inclusion as Frontier;
• Kuwait – Possible inclusion as Secondary Emerging;
• Taiwan – Possible promotion to Developed from Advanced Emerging; and
• Thailand – Possible promotion from Secondary Emerging to Advanced Emerging.

Mark Makepeace, Chief Executive of FTSE Group, said: “Global markets are constantly changing and more countries are opening their markets to international investment. Congratulations to the Czech Republic, Malaysia and Turkey on being promoted to Advanced Emerging market status, following significant changes to their regulations and investment procedures. Furthermore, Malaysia’s promotion to Advanced Emerging status and Thailand’s inclusion on the Watch List highlights the encouraging progress taking place in the financial markets of the ASEAN region.”

Over the next year, FTSE will engage with market representatives of countries on the Watch List to discuss and review their progress against the assessment criteria, and continue to communicate their progress to the international investment community. Full details of the countries on the Watch List are available at www.ftse.com/country.

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