FTSE Russell have announced that Argentinian securities have been removed from its FTSE Frontier Index Series due to capital controls remaining in place in the country.

In its quarterly review of Frontier Markets Indexes, FTSE confirmed that Argentinian equities will no longer sit within the FTSE Frontier Index Series after the Banco Central de la Republica Argentina’s (Central Bank of Argentina, “BCRA”) to keep in place the capital controls that it had imposed last year with no clear indication of when (or if) they will be removed. FTSE had previously stated if capital controls were to remain in place Friday 20th March then it would remove locally listed Argentinian securities from the FTSE Frontier Series.

In a further note released on 31st March 2020, FTSE confirmed that Argentina will be downgraded from a Frontier Market to an Unclassified Market in September 2020 if capital controls remain in place. It was previously removed from the Watch List for a potential upgrade to an Emerging Market and is now effectively on a the Watch List for a downgrade or complete removal from FTSE Indexes.

In total, 29 Argentinian securities – with the most notable names being Banco Macro, Banco Argentina and Grupo Financiero Galicia – have been removed from the FTSE Frontier Index Series (All-World, Large Cap, Small Cap and Mid Cap). Argentinian equities comprised of almost 10% of the FTSE Frontier Markets Index.

The companies that have been removed, as well as the specific Index(es) the have been removed from, are listed below:

Company Name	All-Cap	All-World	Large Cap	Mid Cap	Small Cap
BANCO MACRO S.A. ADS	Yes	Yes	Yes	–	–
GRUPO SUPERVIELLE S.A. ADR	Yes	Yes	Yes	–	–
BOLSAS Y MERCADOS ARGENTINOS ORD SHS	Yes	Yes	Yes	–	–
Banco BBVA Argentina SA	Yes	Yes	Yes	–	–
Ternium Argentina	Yes	Yes	Yes	–	–
TRANSPORTADORA DE GAS DEL SUR B	Yes	Yes	Yes	–	–
Holcim Argentina SA	Yes	Yes	Yes	–	–
GRUPO FINANCIERO GALICIA	Yes	Yes	Yes	–	–
YPF D	Yes	Yes	Yes	–	–
CENTRAL PUERTO S.A. B	Yes	Yes	Yes	–	–
CRESUD SA	Yes	Yes	Yes	–	–
PAMPA ENERGIA S.A.	Yes	Yes	Yes	–	–
IRSA INVERSIONES Y REPRESENTACIONES S.A.	Yes	Yes	Yes	–	–
TELECOM ARGENTINA SA ADS	Yes	Yes	Yes	–	–
ALUAR ALUMINIO	Yes	Yes	Yes	–	–
EMPRESA DISTRIBUIDORA Y COMERCIALZADORA	Yes	Yes	Yes	–	–
ALTO PALERMO S.A. ADS	Yes	Yes	Yes	–	–
CONSULTATIO SA	Yes	Yes	–	Yes	–
SOCIEDAD COMERCIAL DEL PLATA SA	Yes	Yes	–	Yes	–
METROGAS B	Yes	Yes	–	Yes	–
Capex	Yes	Yes	–	Yes	–
ENDESA COSTANERA S.A. B	Yes	Yes	–	Yes	–
Mercado De Valor	Yes	Yes	–	Yes	–
BOLDT SA	Yes	Yes	–	Yes	–
Compania de Transpo	Yes	Yes	–	Yes	–
Autopistas del Sol S.A.	Yes	–	–	–	Yes
TRANSPORTADORA DE GAS DEL NORTE S.A. C	Yes	–	–	–	Yes
SAN MIGUEL B	Yes	–	–	–	Yes
DISTRIBUIDORA DE GAS CUYANA B	Yes	–	–	–	Yes

Rival index-compiler Morgan Stanley Capital International (MSCI) upgraded Argentina from a Frontier Market to an Emerging Market last year, but if capital controls remain in place then it may open dialogue for the country to either be downgraded or completely removed from MSCI’s Indexes all together. Despite the MERVAL Index ranking as the best Frontier Market in 2019, it may struggle this year if capital controls are to remain in place, especially as index compilers and investors keep a close eye on any future market developments.