Consultation on the Potential Removal ofthe MSCI Venezuela Index from the MSCIEmerging Markets Index
March 15, 2006

Introduction

MSCI Barra, a leading provider of benchmark indices and risk management
analytics products, announced today that it is proposing to remove the MSCI
Venezuela Index from the MSCI Emerging Markets Index



MSCI Barra welcomes any feedback from the investment community on this
proposal, and plans to contact market participants to solicit feedback.

Please note that this consultation may or may not result in any changes to thestatus of the MSCI Venezuela Index in the Emerging Markets Index. Changes, ifany, will be announced in advance.

© 2005 MSCIAll rights reserved.

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Rationale for the Proposal


MSCI Equity Index Series are constructed and managed with a view to being
fully investable from the perspective of international institutional investors. MSCI
strives to achieve this objective by providing indices that are replicable. This
includes representing constituents in the index that can easily and cost effectively
be reflected in global institutional portfolios of reasonable size.

Consequently, this proposal has been put forward in light of:−

The continued presence of investability restrictions linked to the foreignexchange regime put in place in the country in February 2003,−

The lack of liquidity of most of its constituents,−

The continued weight decrease of the MSCI Venezuela Index in the MSCIEmerging Markets Index over the last several years.

As of the close of February 28, 2006, the weight of the MSCI Venezuela Index in
the MSCI Emerging Markets Index was 0.085%.

© 2005 MSCIAll rights reserved.

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Current Situation – Foreign Exchange Control
 There are currently controls on foreign exchange in effect under Venezuelan law
which restrict the access of companies and individuals to foreign exchange

 CADIVI (Foreign Exchange Administration Commission), was created tocoordinate, manage, control and establish the set of requirements for thedistribution of foreign currencies

 Since the exchange of VEB for foreign currencies is restricted, repatriation of sales
proceeds and dividend payments are halted. However, CANTV has been receiving
approval from CADIVI for the conversion of VEB to US dollars for repatriation ofdividends.

 Additionally, CADIVI has allowed the ADR/Bond Swap parallel foreign exchange
market to function.

© 2005 MSCIAll rights reserved.

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Current Situation – Liquidity Profile The MSCI Venezuela (VE) shows extremely low market liquidity compared to theMSCI Argentina (AR), MSCI Colombia (CO) and MSCI LATAM

 The chart below outlines the average Annualized Traded Volume Ratios (ATVR) ofthe constituents of the MSCI Venezuela and other selected Indices at the mostrecent Quarterly Index Reviews (QIR) and Annual Index review (AIR)Average Local ATVRs
90.00%
76.65%
76.08%

80.00%

69.06%

70.00%
60.00%
50.00%
40.00%

39.11%
33.30%
29.00%

30.00%

35.38%

34.37%

36.52%

29.90%

28.22%

23.74%

33.55%

27.25%

22.64%

24.61%

20.00%
10.00%
1.73%

1.74%

1.51%

1.38%

0.00%
May 2005 AIR

Aug 2005 QIRATVR MSCI VE© 2005 MSCIAll rights reserved.

Nov 2005 QIRATVR MSCI LATAM

Feb 2006 QIRATVR MSCI AR

Feb 2006 QIR + ADRs

ATVR MSCI CO

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Current Situation – Liquidity Profile (Cont’d) MSCI Venezuela: Constituents and weights in selected indices−Poor liquidity (Local ATVR)−

Only CANTV D has a Level 3 ADR program−Index replication via ADR does not provide diversification−High cost to replicate ~35% of the non ADR MSCI Venezuela

Security
CANTV Telefonos Venez. D
Mercantil Svcs Fin B
Mercantil Svcs Fin A
Banco Provincial
Banco Venez. de Credito
Total

FIF
0.95
0.60
0.40
0.13
0.25

Index
Mcap
1,052
244
225
58
31
1,609Local
ATVR
2.03%
3.28%
5.18%
0.99%
2.47%

ADR
ATVR
117.25%Final
ATVR119.29%
3.28%
5.18%
0.99%
2.47%

MSCI VE MSCI EM
WeightWeight65.35%
0.058%
15.14%
0.013%
13.97%
0.012%
3.62%
0.003%
1.93%
0.002%
100.00%0.088%

Data as of February 28, 2006. Market Cap data in USD Million.

© 2005 MSCIAll rights reserved.

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Current Situation – Country Index Relative Sizes
 MSCI Venezuela - smallest weight of the MSCI EM Index during 2004- 2005
 MSCI Colombia – smallest weight of the MSCI EM Index during 2001 – 2003

Lowest Weights in MSCI EM
30-Dec-05

31-Dec-04

31-Dec-03

31-Dec-02

31-Dec-01

0.07%
0.22%
0.27%
0.28%
0.37%
0.47%
0.49%
0.60%
0.80%
0.87%
1.22%
1.41%
1.68%
1.69%
1.84%

0.15%
0.32%
0.18%
0.16%
0.17%
0.48%
0.45%
0.54%
0.44%
0.83%
1.58%
1.86%
1.94%
1.96%
2.48%

0.13%
0.23%
0.17%
0.18%
0.11%
0.50%
0.57%
0.59%
0.25%
0.52%
1.01%
1.53%
2.06%
1.29%
3.23%

0.15%
0.29%
0.18%
0.28%
0.11%
0.48%
0.51%
0.46%
0.22%
0.50%
1.26%
1.12%
1.61%
1.28%
1.72%0.28%
0.26%
0.18%
0.16%
0.14%
0.69%
0.39%
1.10%
0.19%
0.61%
0.93%
0.74%
2.61%
1.13%
1.54%

Venezuela
MoroccoJordanPakistan
Colombia
Philippines
Peru
Argentina
EgyptCzech RepublicHungary
Indonesia
Chile
PolandThailand© 2005 MSCIAll rights reserved.

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Current Situation – Country Index Relative Sizes (Cont’d) The table below outlines the weekly weight of the MSCI Venezuela Index in the MSCIEmerging Markets Index from January 2000 through March 2006.
MSCI Venezuela
Weight in MSCI EM
0.90%
0.80%
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
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© 2005 MSCIAll rights reserved.

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Proposal / Alternatives

Proposal

Remove the MSCI Venezuela Index from the MSCI Emerging Markets Index andreclassify it as a stand-alone index

Other Alternatives

Delete illiquid constituents from the MSCI Venezuela, potentially resulting in a single
stock Country Index member of the MSCI Standard Equity Index Series.

Keep the status of the MSCI Venezuela Index unchanged at this point in time.

© 2005 MSCIAll rights reserved.

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Investor Feedback

 MSCI Barra now invites our clients and investors to comment on the proposals
presented in this consultation paper. To participate in this consultation please contact:−Dorsey Horowitz, MSCI, New York+ 1 212 762 5790−

Aatish Suchak, MSCI, London+ 44 20 7425 6660−

Sarah Sachdev, MSCI, Hong Kong + 852 2848 6740

−Masao Ikeda, MSCI, Tokyo© 2005 MSCIAll rights reserved.

+ 813 5424 5470

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Notice and Disclaimer

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