Latam Equity Quant: MSCI August review – what to expect

研报英文原文证据摘录

Latam Equity Quant: MSCI August review – what to expect

Non-members close to the threshold to watch for future reviews

We do not expect any additions to the MSCI LatAm Standard Index in the August review.

For future reviews, we continue to monitor Copasa (CSMG3 BZ), which meets the free

float requirement but remains below the market capitalization threshold (Exhibit 2).

In Colombia, Ecopetrol (ECOPETL CB) could become a candidate for future MSCI reviews

its market cap continues to increase. In Ecopetrol’s case, a specific requirement applies

to securities with free float below 15%. In such cases, for a stock with a Foreign

Inclusion Factor (FIF) below 15% to be included in the Standard Index, its

free‑float‑adjusted market capitalization must be at least 1.8× the threshold (minimum

free‑float‑adjusted market cap required for Standard Index inclusion).

Market cap and free float thresholds + the buffer zones

Market capitalization and free float thresholds are the main defining

factors for index additions/deletions. Both are set in USD terms.

Liquidity thresholds also apply.

Country indices are updated separately. The MSCI considers only local listings for Brazil,

Mexico, Chile and Colombia. Conversely, only ADRs are allowed for Peru and Argentina

given higher liquidity.

Companies are assigned to one of three segment-size groups: Large, Mid and Small cap.

A country standard index includes companies in the Large and Mid-cap segments only.

There is no overlap between the standard index (Large + Mid cap) and the Small cap

index.

The MSCI uses "buffer" zones, which are limits above/below the segment-size cutoff

(more below) that give some flexibility to market capitalization boundaries, reducing the

number of index changes.