The senior management at the Lima Stock Exchange must have sighed with relief on September 30, when MSCI reconfirmed Peru’s emerging market status. Its chairman, chief executive and business development manager had been on a gruelling roadshow talking to investors from London to New York, Boston, Philadelphia and San Francisco, urging them to make the case for Peru with the international indices provider.
A month earlier, MSCI had launched a consultation to potentially downgrade Peru to frontier market in its stock indices. Its concerns were about the smaller number of investible stocks, as the firm’s requirement were now met by only three Peruvian issuers, down from 12 in 2014. The slump in commodities prices had badly damaged mining groups in particular, the economy’s main drivers. If one more company slipped off the investible stocks group, the Latin American market would automatically be considered a frontier one.
