Israel’s economic classification is due to change this year and is expected to be included as a developed market rather than an emerging market.
Times Online writes:
“British investors have tended to ignore Israel, but its stock market will be thrust into the limelight this year when it is promoted from emerging to developed market status.” This is referring to the fact that Israel is up for OECD membership, and if accepted — and it looks like it will happen — Israel will join the prestigious organization and be considered a “developed country.”
Some pundits have argued that admission into the OECD will actually hurt Israeli stocks as Israel is about 2% of the MSCI Emerging Markets Index, and its share in the global investment pie would fall to 0.2% if Israel is admitted to the developed markets index. What they neglect to mention is that there is a heck of a lot more money under management in developed markets than in emerging markets. So Israel’s weighting may drop, but the amount of money available to invest will be substantially more.
Despite the conflict Israel’s economy continues to boom.
Crossposted on Soccer Dad.
