Kuwait stock exchange Qatar, Kuwait, Oman and Jordan are under review as is the UAE for a possible upgrade to emerging market status, an S&P document seen by Gulf News shows. Greece looks set to be downgraded to emerging market from developed market status in the country classification for the Standard & Poor's (S&P) Global Equity Index Series in 2012.
The S&P has sought feedback from select asset management firms on countries which are being considered for reclassification. The S&P Global Equity Index Series is divided into three major country classes — developed, emerging, and frontier.
Charbel S. Azzi, S&P Indices' Head of Client Coverage for the Middle East and Africa told Gulf News that the decision on the upgrades and the downgrade will be made during the first quarter of next year.

Great interest
"We have great interest in this region. On an annual basis, we would be reviewing the classification and the criteria for countries that qualify under our minimum requirements," said Azzi.
Qatar is currently classified as a frontier market in all S&P branded indices.
"We are proposing that Qatar be considered an emerging market as it meets all of our quantitative criteria to qualify as an emerging market," the S&P document says.
The highlights for Qatar include dividends and capital gains not being subjected to tax. The Qatar Exchange, a self-regulated entity under the jurisdiction of the Ministry of Business and Trade, is responsible for monitoring all securities market laws and ensuring that entities comply with the rules and regulations.
The Qatar Central Bank acts as the government's agent to exercise monetary policy and monitor the banking system.
The Qatar Financial Market Authority, a new market regulator, has been established. Non-resident foreign investors in aggregate may own up to 25 per cent of a listed company that allows such ownership. There are company-imposed individual ownership limits. With approval, listed companies can increase foreign ownership levels to 100 per cent.

Higher rating
"Qatar currently accounts for approximately 8.89 per cent of the weight in the S&P Frontier BMI. If it is designated an emerging market, its weight will be roughly 0.61 per cent in the S&P Emerging BMI and 0.54 per cent in the S&P/IFCI Composite," S&P said.
Kuwait is currently classified as a frontier market in all S&P branded indices.
"We are proposing that Kuwait be considered an emerging market. Despite meeting the basic criteria for developed market status, Kuwait suffers from uncertainties over market accessibility, investor registration, and tax issues that unnerve investors. Due to this and competitor practice, it is incompatible with our developed market criteria and seems best suited for a possible promotion to emerging market classification," the S&P said.
"Kuwait currently accounts for roughly 15.86 per cent of the weight in the S&P Frontier BMI. If it is designated an emerging market, its weight will be approximately 1.09 per cent in the S&P Emerging BMI and 0.96 per cent in the S&P/IFCI Composite."
Oman is currently classified as a frontier market.
"We are proposing that Oman be considered an emerging market as it meets all of our quantitative criteria to qualify as an emerging market," said the S&P.
With regard to Jordan, S&P said, "...We are proposing that Jordan be considered an emerging market..."
The S&P upgrades could open the floodgates for foreign capital inflows into the region's markets.