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MSCI Barra Announces its Conclusions from its Recent Market Classification StudyGeneva - June 18, 2008 - MSCI Barra (NYSE:MXB), a leading provider of investment decision support tools
worldwide, including indices and portfolio risk and performance analytics, announced today its conclusions from its
recent discussions with the investment community on the classification of markets in the MSCI Equity Indices. As
part of its conclusions, MSCI Barra is amending its country classification framework and consequently will:• Reclassify Jordan from Emerging Markets to Frontier Markets at the end of November 2008.
• Open consultations on proposals to :o Reclassify Israel and South Korea as Developed Markets,
o Reclassify Kuwait, Qatar and the United Arab Emirates as Emerging Markets.
• Consider reclassifying Argentina and Colombia as Frontier Markets unless significant improvements in therelevant capital flow restrictions are observed.
MSCI Barra’s conclusions and decisions take into account the feedback MSCI Barra received on the market
classification discussion paper published on January 23, 2008.
The feedback from the institutional investment community on the Emerging/Developed Markets classification
centered on the appropriate balance between a country’s economic development and the accessibility of its market,
including the efficiency of its operational framework, as well as on the role of geo-political risk.
• One main conclusion from the discussion is that a more appropriate market classification approach is one
that emphasizes the advancement of the economy jointly with a reasonable level of overall market
accessibility rather than one that focuses mainly on the presence of a highly efficient operationalframework.
• While international institutional investors believe that geo-political risk is an important factor in market
classification, the feedback suggests that the difficulty in assessing this factor makes it unsuitable for use
as a pass-or-fail dimension for the classification of a country as a Developed Market.
In the Frontier/Emerging Markets classification framework, the feedback suggests placing greater emphasis on therole of market accessibility for classification as an Emerging Market, albeit with attention to preserving index
stability as much as possible.
These conclusions lead MSCI Barra to announce the following decisions in the management of the MSCI Equity
Indices:1.

Amendments to the current country classification framework, effective immediatelyMSCI Barra is adapting the Emerging/Developed Markets classification framework by:••

Clarifying that the absence of major geo-political risk is not a necessary condition for designation as a
Developed Market.
o Similar to domestic political risk, geo-political risk will remain a dimension in the assessmentof the sustainability of market accessibility and economic development, as instability may be
an indicator of potential accessibility issues and may influence economic development.
Considering the criterion of full convertibility of currency together with the other market accessibility
criteria and not as a separate individual disqualifying criterion.
o While the ability to move money in and out of a country is critical and requires a smoothly
functioning domestic foreign exchange market, the absence of a seamless offshore cash
currency market, while affecting operations, is not considered decisive enough to justify it
being a disqualifying condition.

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MSCI Barra is adapting the current Frontier/Emerging Markets classification as follows:••

2.

Country indices with fewer than three companies meeting the Emerging Markets size and liquidity
requirements for four consecutive Semi-Annual Index Reviews will be reclassified as Frontier Markets.
Countries imposing restrictions on inflows or outflows of capital that create significant obstacles toinvestment flows into or from equity markets will be considered for reclassification as Frontier Markets.
o MSCI Barra will add countries imposing such restrictions to a monitoring list after a threemonth period following the introduction of the restrictions.
o A consultation with market participants on a potential reclassification from Emerging Markets
to Frontier Markets will be opened for these countries if the restrictions have not been eased
after 12 months following their introduction.

Decision to reclassify Jordan from Emerging to Frontier Markets
MSCI Barra will reclassify Jordan from Emerging Markets to Frontier Markets. The majority of the constituentsof the MSCI Jordan Index do not meet the minimum size and liquidity requirements set for the Emerging
Markets indices. This reclassification will be implemented at the November 2008 Semi-Annual Index Review.

3.

Proposals regarding reclassifications from Emerging to Developed Markets
In July 2008, MSCI Barra will open a consultation on a proposal to reclassify Israel and South Korea fromEmerging Markets to Developed Markets. In the course of this consultation with international institutional
investors, MSCI Barra will focus on the suitability of such reclassifications and on the potential transition
timelines. MSCI Barra will also actively solicit feedback from the South Korean government and regulators tounderstand their intentions, implementation plans, and timetables with respect to the remaining improvementsin the current market accessibility framework. In particular, many international institutional investors remain
concerned with the lack of full convertibility of the Korean Won, including the lack of an efficient offshore market
for the currency. MSCI Barra intends to incorporate this feedback in its own assessment and decisions andintends to announce its final decision on the potential reclassification of Israel and South Korea based on thisconsultation no later than June 2009. If any changes in country classification are warranted based on theconsultation, the proposed timeline for implementation of such changes will also be made public at that time.
MSCI Barra also intends to update the investment community with a preliminary assessment from thisconsultation in December 2008.

4.

Proposals regarding reclassifications from Frontier to Emerging Markets
In July 2008, MSCI Barra will begin a consultation on a proposal to reclassify Kuwait, Qatar and the United
Arab Emirates from Frontier Markets to Emerging Markets. In the course of this consultation with international
institutional investors, MSCI Barra will focus on the suitability of such reclassifications and on the potential
transition timelines. MSCI Barra will also actively solicit feedback from authorities and regulators of thesemarkets to understand their intentions and implementation plans with respect to the remaining improvements inthe current market accessibility framework, as articulated by investors. MSCI Barra intends to announce its final
decision on the potential reclassification of Kuwait, Qatar, and the United Arab Emirates based on thisconsultation no later than June 2009. If any changes in country classification are warranted based on theconsultation, the proposed timeline for implementation of such changes will also be made public at that time.
MSCI Barra also intends to update the investment community with a preliminary assessment from thisconsultation in December 2008.

5.

Proposals regarding reclassifications from Emerging to Frontier Markets
If no significant improvements in terms of restrictions of inflows/outflows of capital are observed by December
2008 in Argentina and Colombia, MSCI Barra will open in January 2009, and close in February 2009, aconsultation with market participants on a proposal to reclassify these markets as Frontier Markets coinciding
with the May 2009 Semi-Annual Index Review. MSCI Barra welcomes feedback from the authorities and2 of 4www.mscibarra.com

regulators on their plans to address these capital flow restrictions issues raised by investors. Important
hindrances to the inflows and outflows remain in place in these two countries, including cash reserves
requirements and repatriation constraints.

###MSCI Barra will be holding a Press Conference Call following the announcement to answer questions from themedia:
Date:
Time:
International Dial-In:
Conference ID:
Toll Free Numbers:
US:
888.889.5602
UK:
0800.032. 3836

Wednesday June 18, 2008
6pm EDT/11pm BST/Midnight CET+1.973.582.2860
52516516

Hong Kong:Japan:

800.933.597
0053.116.0590Please note that this press conference call is restricted to journalists. Replays of this call will not be available.
Clients and other interested parties should contact MSCI Barra Global Client Service with any enquiries.

For further information on MSCI Barra, please visit our web site at www.mscibarra.com
For media enquiries please contact:
Sally Todd | Clare Milton, Penrose Financial, London
Pen Pendleton | Ann Taylor Reed, Abernathy MacGregor, New York+ 44.20.7786.4888+ 1.212.371.5999

MSCI Barra Global Client Service:
Joe Pivarunas, MSCI Barra, London
Phil Juliano, MSCI Barra, New York
Jackson Wang, MSCI Barra, San Francisco
Jane Xu, MSCI Barra, Hong Kong
Masao Ikeda, MSCI Barra, Tokyo+ 44.20.7618.2222+ 1.212.762.5790+ 1.415.576.2323+ 852.2848.7333+ 813.5424.5470

About MSCI Barra
MSCI Barra is a leading provider of investment decision support tools to investment institutions worldwide. MSCIBarra products include indices and portfolio risk and performance analytics for use in managing equity, fixedincome and multi-asset class portfolios.
The company’s flagship products are the MSCI International Equity Indices, which are estimated to have over
USD 3 trillion benchmarked to them, and the Barra risk models and portfolio analytics, which cover 56 equity and46 fixed income markets. MSCI Barra is headquartered in New York, with research and commercial offices aroundthe world. Morgan Stanley, a global financial services firm, is the majority shareholder of MSCI Barra.

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