snuck out of the First World and into the Second.
It's intentional. They were trying to escape the Troika.
Has Greece hit bottom? Well, some investors think
it has re-"emerged" as an emerging market
country, again.
Gee, thanks Banksters. Rising like the phoenix.
checkit: Telegraph
Greece
reclassified to 'emerging market' from developed
A
major fund manager has reclassified Greece from a developed to an emerging
market, in an unprecedented move reflecting the "unfortunate economic
tailspin" of the Greek economy, which has threatened the future of the euro.
Greece
reclassified to 'emerging market' from developed
Greece
is in its sixth year of recession Photo: EPA
By
Louisa Peacock
7:48PM
GMT 02 Mar 2013
Russell
Investments, which advises funds with $2.4 trillion (£1.6 trillion) in assets,
said the Greek economy has been a "world concern" since it revealed
unsustainable levels of public debt in 2009.
The
American-based company said Greece, which Russell designated as a developed
market in 2001, has been on a path towards reclassification as an emerging
market since 2010, having failed Russell's operational and macro risk tests,
including per-capita income, total market capitalisation and the level of
trading volume, which determine the economic health and status of countries.
Managers
at Russell will be forced to buy and sell shares to align holdings with their
funds' criteria, following the reclassification.
In a
10-page note on the relegation of Greece, Mat Lystra, Russell's senior research
analyst, said: "Since the country began revealing unsustainable levels of
public debt in 2009, it has been in an unfortunate economic tailspin that at
times has threatened to pull apart the entire European Monetary Union."
He
added that despite several bailouts and efforts to stem an outright Greek
default, "any opportunities in the Greek economy have become inherently
riskier exposures for global investors".
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"During
our 2013 global market risk reviews, when we again evaluated the two risk
profiles, Greece failed both tests," the note said.
The
news comes as officials from the European Union and the International Monetary
Fund return to Athens on Sunday to assess Greece's performance under a bailout
plan as the government plays down the prospect of public sector job cuts.
The
heads of the "troika" mission from the EU, IMF and the European
Central Bank will meet finance minister Yannis Stournaras to review progress on
privatisations, tax administration reforms, bank recapitalisation and steps to
shrink the public sector.
In
its sixth year of recession, Greece has agreed to shrink its public sector by
150,000 by 2015 to cut its wage bill, mainly through attrition: hiring one new
person for every 10 who retire.
Russell
recognised that relegating Greece to an emerging market would invite questions
over why the fund had not also reclassified Portugal or Spain; two more eurozone
countries with troubled economies.
"While
both of those countries have had their share of problems, and although neither
is immune from a potential change in market-risk status, we haven’t seen the
same degree of decline as we’ve observed in Greece – nor the same rise in
risk," the statement said.
Greece
is the first country Russell has cut to emerging from developed market status.
Russell's
global indexes methodology describes a three-year path towards a country's
potential reclassification – by way of the company's developed, emerging or
frontier market categorisation – as having become either more or less risky for
investors.
The
statement said: "Russell’s methodology requires developed markets to be,
in general, the least risky and most efficient in which to trade."
