Of MSCI and Men: Kuwait “pain trade” for another year
For MSCI, Kuwait and Iceland are moving up, Peru down
Index provider MSCI, the effective determinant of sizeable equity market inflows and outflows which are totally disconnected from country and stock fundamentals, released its annual country classification review last night.
Kuwait is moving from FM to EM (nine stocks, 50bp weight) as expected, which likely means that the “pain trade” of owning the larger Kuwait stocks which, fundamentally, look unappealing relative to FM and small EM peers, but which continue to rally on index-related inflows, persists for another few quarters...
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