Index provider MSCI (NYSE: MSCI) said today it will reclassify Greece as an emerging market following its November 2013 semi-annual index review on Nov. 26.
The move was announced in June when MSCI became the second major index provider to demote Greece to emerging markets from developed market status. Russell Investments was the first index provider to demote Greece to emerging market status. Last week, S&P Dow Jones Indices followed suit and demoted Greece. [Greece Gets Another Emerging Markets Demotion]
MSCI also announced that National Bank of Greece (NYSE: NBG), Piraeus Bank and Alpha Bank will be the Greek companies added to the MSCI Emerging Markets Index. What is interesting about that news is that several big name hedged fund managers, including David Einhorn and John Paulson, have recently announced stakes in Greek banks, including Piraeus and Alpha. [Hedgies Rush to Greek Banks]
Baupost, Eaglevale, Dromeus Capital, Falcon Edge, York Capital and Och-Ziff are among the other hedge funds that are reportedly making large bets on Greek banks. Now, those hedge funds will get the benefit of fund managers that benchmark to the MSCI Emerging Markets Index buying shares in those banks.
The Global X FTSE Greece 20 ETF (NYSEArca: GREK) allocates 15.3% of its weight to bank stocks.