Will Greece become first developed country downgraded to an emerging market?
Wed, 06/20/2012 - 09:25 EDT - Financial Post
Greece is still at risk over the long term of becoming the first economy to be relegated from developed to emerging market status within investment indices, even if it has fended off any immediate exit from the eurozone
LONDON (Reuters) - Greece is still at risk over the long term of becoming the first economy to be relegated from developed to emerging market status within investment indices, even if it has fended off any immediate exit from the euro zone. The unprecedented switch, reversing a path Greece trod only 11 years ago, would cut the country off from investors in more sophisticated markets although it would open it up to fund managers who are more comfortable with risk. ...
A week ago we joked that Greece was rapidly sliding into the "fourth world" (and had the photos to prove it). Well, today Equity Index provider MSCI took our joke and made it into something way too serious when overnight it made Greece the first developed nation ever to be downgraded into "emerging market" status. Not quite fourth world, but that too will come.
Neil Woodford is the Head of Investment at Woodford Investment Management and was formerly Head of UK Equities at Invesco Perpetual was asked a number of things about what he thought was the greatest risks within the world economy right now?
Woodford said: “I see a lot of risk in the world economy. I think growth is the problem, and deflation, really. So I think the world is facing a structural absence of growth for all sorts of reasons…”
Global financial markets are feeling quite apprehensive these days. Three of the four risk appetite indicators that Credit Suisse tracks are in panic territory, and the fourth is fairly close to it. But as is so often the case, the stampede is happening a little late – a reaction to a growth scare from five months ago, rather than a reflection of the future that leading indicators foretell.
LONDON (Reuters) - Greece is still at risk over the long term of becoming the first economy to be relegated from developed to emerging market status within investment indices, even if it has fended off any immediate exit from the euro zone.
“Much better than expected.”
That’s how John Derrick, Director of Research here at U.S. Global Investors, summed up his trip to Greece, the beleaguered country that hopes to put its financial woes behind it and rise again like the phoenix from the Mediterranean culture’s ancient mythology.
BRUSSELS/ATHENS — Greece has three days to reassure Europe and the International Monetary Fund it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid, four eurozone officials said on Tuesday.
The lenders are unhappy with progress Greece has made towards reforming its public sector, a senior eurozone official involved in the negotiations said, while another said they might suspend an inspection visit they resumed on Monday.
ATHENS — Ratings agency Fitch upgraded its sovereign credit rating for Greece by one notch on Tuesday, citing the country’s progress in cutting its budget deficit and the receding risk of its eurozone exit.
After nearly crashing out of the euro last year and coming under attack for stalled reforms, Greece has won praise in recent months from its international lenders for getting back on track and pushing through unpopular austerity measures.
Last week I was interviewed by Constantine von Hoffman for a CBS news article on regarding economic nightmares for Obama's 2nd term.
Calculated Risk was interviewed as well. His nightmare scenario is war, specifically noting the rise of Golden Dawn.
LONDON (Reuters) - Greece has been placed on review for relegation to emerging market status by index provider MSCI, which would make it the first country to be thrown back out of developed equity indices. Analysts, however, reckon any such relegation would only happen if Greece were to exit the euro zone. MSCI, which has $7 trillion benchmarked against its indices globally, said on Wednesday that Greece was no longer in line with developed markets' size requirements. It also said Greek authorities had failed to address concerns over certain kinds of transactions. ...