Up 29% year-to-date, the Market Vectors Egypt Index ETF (NYSEArca: EGPT) is one of this year’s top-performing single-country emerging markets ETFs.
EGPT ‘s bullishness could remain in tact after Egypt, North Africa’s largest economy, dodged a demotion to frontier markets status in MSCI’s (NYSE: MSCI) annual marker reclassification.
EGPT and Egyptian equities have soared this year after a military coup ousted a government with deep ties to the Muslim Brotherhood 11 months ago.
Last year, the index provider put Egypt on watch for a possible demotion to frontier status in the wake of increased political volatility and depleted foreign currency reserves. Although EGPT recently tumbled After former Egyptian army chief Abdel Fattah al-Sisi’s win in the presidential election, MSCI removed Egypt from consideration for a market classification demotion. [Egypt ETF Falls After Election Results]
“Following the substantial increase in Egyptian foreign currency reserves, MSCI also announced that it is no longer considering launching a public consultation on a potential exclusion of the MSCI Egypt Index from the MSCI Emerging Markets Index,” said MSCI in a statement.
Earlier this year, another index provider, Russell Investments, demoted Egypt to frontier status. The index provider will move Egypt to frontier status effective June 27, 2014.