(Adds comment from MSCI, comment by bourse president, adds NEW YORK to dateline)
NEW YORK/LIMA, June 14 (Reuters) - Index provider MSCI Inc decided on Tuesday to keep Peru’s stock exchange in its emerging markets group instead of downgrading it to the higher-risk “frontier” category due to low liquidity.
Peru had rolled out a series of reforms last year that helped boost turnover on the mining-heavy bourse in a bid to avoid a downgrade, which it had estimated would prompt billions in capital outflows.
MSCI said in a statement announcing its decision that it would reclassify Peru as a frontier market if at any point it no longer had at least three securities that qualify as emerging market investments.
MSCI’s emerging markets index is the benchmark for more than $1 trillion in investor assets globally, exposing included stocks to a bigger pool of potential investors.
“It’s excellent news,” the president of Peru’s bourse, Christian Laub, said following the decision. “There’s a lot we still have to do, from improving our pricing and information systems to incorporating more products into the market.”
Laub said he expects more companies listed on the bourse now to qualify as emerging market securities in a future MSCI review, possibly in November.
Last year Peru passed a capital gains tax exemption and introduced incentives for market makers and new rules for automated trading and short selling.
MSCI also said on Tuesday it would hold off on adding China-listed stocks to its emerging markets index, a major disappointment for Chinese policymakers who had sought to satisfy MSCI’s calls for improved access to its capital markets.
Reporting by Dan Burns and Mitra Taj; Editing by Matthew Lewis