A Potential Windfall for Israel Due to MSCI Considering Region Reassignment

Posted on 12/24/2021

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Global index provider MSCI is contemplating moving Israel to a new region Europe. This would impact benchmark indices. This would also allow massive amounts of passive inflows into the Israeli equity market. The move would be controversial as Israel is not a European country.

Israel is the only country in the Middle East in the developed market category.

“The MSCI Israel Index has more economic exposure to Europe than to the Pacific and Middle East regions,” MSCI said, noting the most exposure still comes from North America.

In 2010, MSCI moved Israel from an emerging market country to a developed market country.

Russell’s FTSE indices considers Israel a developed market economy and in the region of the Middle East.

Keywords: Tel Aviv Stock Exchange.