MSCI relegation for three lenders takes them off investors' radars

MSCI has confirmed the worst-case scenario by deciding to strike the stocks of three out of the country's four systemic banks - National, Piraeus and Eurobank - from the MSCI Standard Greece index and relegate them to the MSCI Small Cap Index during the biannual revision of its indexes, with an immediate impact on the Athens stock exchange's banks index, which tumbled 7.1 percent on Wednesday.

The reasons for the exit of the three banks, announced at midnight on Tuesday, are related to the reduction of their capitalization below the $1 billion level set by MSCI as a criterion, in the cases of Piraeus and National, and to the rebalancing of the index, in Eurobank's case.

The local market had broadly priced in Piraeus's relegation, but the news that Eurobank and National will also be ejected from the Standard index took many portfolios by surprise, even though Societe...