FTSE: Greece faces chance of demotion
SEOUL (Reuters) – Greece faces a serious chance of demotion to advanced emerging market status and has a long way to go to retain its current developed designation, the chief executive of global index compiler FTSE said yesterday. The FTSE retained Greece on a watch list for possible demotion for a second consecutive year yesterday following its 2007 annual review of its country classifications, saying it still fell short of five criteria. «There’s a real chance that Greece will be demoted,» Mark Makepeace, chief executive of the FTSE, told Reuters in an interview in Seoul. «They are making progress but clearly they’ve got a long way to go,» he added. In its review, the FTSE noted Greece had fallen short of developed market requirements in five criteria, including easing restrictions on off-exchange transactions and short selling. The FTSE added it would work with the Greek exchange and regulatory authorities to find solutions by the first half of 2008. To Makepeace, some of the problems in Greece also appeared linked to the size of the market. «It is a relatively small and closed market in terms of community and that just exacerbates some of the issues.» But Greek’s bourse operator said it was confident of avoiding a demotion. «I am certain Greece will have no problem fulfilling the five criteria before the evaluation by the FTSE in 2008,» Spyros Kapralos, Hellenic Exchanges CEO, told Reuters in Athens. Any demotion would be announced next year and implemented in 2009.
