Market data boost for Qatar and UAE as ratings status upgrade kicks in
MSCI’s upgrade is prompting financial institutions to revisit Qatar and UAE markets such as Dubai (pictured)
Interactive Data is beefing up its market data service for the Middle East and North Africa in the wake of the recent announcement that ratings agency MSCI will upgrade its ratings for Qatar and the United Arab Emirates.
In June, MSCI announced it would upgrade the two countries from frontier market to emerging market status. The rating is important to investors, many of whom will not invest in a frontier market. In particular, many international investment funds will now be able to target the region in a way that was not previously possible. The MSCI upgrade will be reflected in its indices from May 2014.
Interactive Data runs a consolidated data feed serving Abu Dhabi, Bahrain, Dubai, Dubai Commodities Exchange, Dubai Mercantile Exchange, Nasdaq Dubai, Kuwait and Qatar, as well as a total of 150 exchanges around the world. That feed is used by trading firms to power algorithms and electronic trading tools. According to Rob Lane, general manager for real-time feeds and 7ticks EMEA at Interactive Data, the ratings change will make a big difference to financial institutions.
“The recent MSCI index upgrades firmly establish this region on the map for emerging market investors,” he said. “As a result, a growing number of international investors will require high quality, cross-asset data for the various markets in the region. Asia-, Europe- and US-based firms will also require reliable connectivity to these markets in the most cost-effective way. Through our ongoing investment, we can provide a broad range of content to these firms looking to access the MENA region and efficiently deliver it to them through the 7ticks network.”
Saudi Arabia remains classified as a frontier market by MSCI. While rumours have persisted for some years of the Tadawul opening up to direct foreign investment, the most recent estimates point to a tentative date at some point next year. Meanwhile, Morocco will be downgraded from emerging market to frontier market status, partly as a result of deterioration in government finances caused by continued attempts to maintain a fuel subsidy in the face of the rising price of oil.
