After regaining investment grade, an important milestone for the Athens Stock Exchange is its upgrade to the category of developed markets. However, she still seems to be a long way off.

MSCI denied on Thursday any expectations for the inclusion of the Greek stock market in the “watch list for upgrading”, with the final reclassification of the AX from developing to developed markets taking place in 1.5 to 2 years.

It should be noted that the A.A. receives ratings from three agencies, MSCI, FTSE and S&P. Everyone sets their own terms and conditions for joining the mature markets.

It is also worth noting that 70% of the funds follow the MSCI indices, making the upgrade by the MSCI house a critical factor in the evaluation of the criteria for the transition of the AXA to developed market status.

However, the management of the Stock Exchange estimates that within this year a house will include the Greek stock market in the watch list. Of course, even if this is done, a period of time that can reach up to 24 months will be required to announce the transition from emerging to developed markets.

Much discussion was caused by a report by JP Morgan according to which Greece will remain, or would be better to remain in the Emerging Markets. According to the House’s analysts, the Greek stock market has only three shares (Ethniki, Eurobank and OPAP), which have the quality for the MSCI Europe index, while in case of reclassification it would be the smallest Market of MSCI Europe, behind Portugal and Austria.

According to MSCIË– rules for market classification 5 stocks must meet the market capitalization/liquidity criteria which are: market cap of $5.8 billion for MSCI Europe and free float of $2.9 billion .

However, JP Morgan refers to the event when Greece was upgraded in 2001 and interest in the market plummeted and wonders if something like this will happen in the next upgrade as well.

The Greek stock market is the only Eurozone stock market that has been downgraded since 2013 and was found from Developed Markets to Emerging Markets.

On Wednesday, June 12, 2013, the Greek stock market was downgraded by the world’s most important rating index, MSCI, with assets of 12 trillion. dollars, which is followed by the biggest international houses. A similar downgrade has not occurred for any other developed market stock market.

The return of A.A. in developed markets it is a gamble of great importance for the Greek stock market, which, due to the great economic crisis and the downgrading of the country’s credit rating, lost its place in the indices of developed markets, with the result that since then the Greek market only draws funds from the small “lake” of investment portfolios and hedge funds investing in emerging markets, which negatively affects trading activity and stock valuations.

In developed markets, assets under management reach $52 trillion, compared to just $6.3 trillion. dollars in emerging markets. It should be noted that “passive” funds invest approximately 88% in Developed and only 12% in Developing.

At the same time, there is a question mark about the funds that will enter the Greek stock market after a possible transfer to the club of developed markets.

According to Axia Research IG credit rating is particularly important for active flows, while the status of developed markets is more relevant for the flows of funds that track indicators (indexed funds, mainly ETFs). However, since the majority of investment funds (62% of the total) are still not indexed, this means that the majority of funds can invest in Greece after upgrading to investment grade rather than developed market status.

Also, passive funds linked to developed market status represent only 14% of EU invested assets, meaning they are less important to the overall picture. Therefore, Axia emphasizes, the investment tier is the one that will bring the majority of incremental inflows to the AXA.