Chris Woods, Governance and Policy Director of FTSE Group, a world-leader in the provision of global index and analytical solutions, sent official letter to Mr.Altai, the CEO of ‘Mongolian Stock Exchange’ JSC on 26 September 2012. In this letter, Mr.Woods officially informed and congratulated that Mongolian market is placed on FTSE’s Watch list for possible promotion to Frontier market status.
He emphasized in his letter that Mongolian Stock Exchange and Mongolian capital markets participants are making a good progress within a short period of time in developing Mongolian capital markets in line with international standards and opening the market to international investors.
FTSE group, based in world’s financial centre London, is a leading index provider in the world which calculates over 120,000 end-of-day and real-time indices covering more than 80 countries. FTSE assumes a major position in global financial market and enjoys an unparalleled reputation for provision of indices and market data that many international investors an investment funds base on to make informed investment decisions.
FTSE group classifies the capital markets of the countries in four categories from ‘Frontier’ to ‘Developed’ according to stringent market criteria. It reviews the classification of countries once a year and places them on a Watch list for possible promotion to the next category or demotion from its existing category within FTSE indices.
The implementation of a world standard trading and settlement system and market infrastructure and increasing transparency in the market had a major influence in placing Mongolia on a Watch list for possible promotion to Frontier market status.
‘Mongolian Stock Exchange’ JSC is extremely delighted to share that having a Frontier market status within FTSE indices is an invaluable chance for Mongolian market to gain international recognition, to attract international qualified investors, improve the market activity and liquidity, speed up the market development and provide relatively cheap, long term financing to companies in rapidly growing sectors.
Please see below for the official announcement on country classifications by FTSE Group.
FTSE Announces Annual Country Classification Review Results
This year’s annual FTSE Country Classification Review has been completed by the independent FTSE Country Classification Committee, and their recommended changes have been ratified by the FTSE Policy Group. As a result of the review all country classifications remain unchanged. Two countries – Argentina and Mongolia – have been added to the Watch List for further assessment in the next annual review.
FTSE reviews the market status of all countries included in its global benchmarks annually and assigns each country to a category – Developed, Advanced Emerging, Secondary Emerging or Frontier – according to a set of criteria developed in conjunction with international investors and the markets. This rules-based approach provides a transparent and objective mechanism for assessing markets.
Countries are promoted or demoted between categories via the Watch List and are added to the Watch List only when the Country Classification Committee agrees that a sufficient number of scores have been modified to warrant proposing a potential reclassification. The Watch List ensures that reclassification of countries is transparent to investors.
Argentina, currently classified as a ‘Frontier’ country, has been added to the list for possible demotion and removal from the index due to the continuing stringent capital controls imposed on international investors and the perceived lack of an independent regulatory authority protecting the rights of shareholders.
Mongolia, currently not included in the index, has been added to the list for possible inclusion as a ‘Frontier’ country, based on its progress in developing a market infrastructure designed to increase foreign investment.
MONGOLIAN STOCK EXCHANGE
Public Relations Department