Morgan Stanley Capital International, a provider of benchmark indexes and multi-portfolio analysis tools, has announced the reclassification of MSCI Nigeria indexes from Frontier Markets to Standalone Market Status.
The MSCI Nigeria Index is designed to measure the performance of the large and mid-cap segments of the Nigerian market.
The latest downgrade by the leading global rating firm implies that MSCI will delete each Nigerian security from the MSCI Frontier Markets Indexes at a price that is effectively zero.
The Morgan Stanley downgrade of the Africa’s largest economy comes after FTSE Russell reclassified Nigeria’s equity country classification to unclassified from frontier markets on September 8, 2023.
The implications of the ratings for Nigeria is that whoever invests in the economy is going to face some uncertainties in view of the increasingly worrisome foreign exchange (FX) liquidity problem and potential challenges in repatriating invested funds.
Despite the fears, however, President Bola Tinubu and the Central Bank of Nigeria (CBN) have over the past few months been assuring foreign investors on the assured repatriation of their funds after investing in Nigeria.
For instance, the President had during the just concluded United Nations General Assembly (UNGA) meeting held series of meetings with investment global leaders and business groups during which he urged them to consider Nigeria as investment destination in view of the ongoing reforms targeted at creating very good investment climate for investments.
