The Canadian equity market has been downgraded from “++” to “+” on foreign room level, according to MSCI Inc.’s 2019 global market accessibility review.

The review is a tool for international institutional investors to track market accessibility for individual countries. It covers various criteria including openness to foreign ownership, ease of capital inflows and outflows, efficiency of the operational framework, availability of investment instruments and stability of the institutional framework.

Market accessibility, is one of the three criteria used when determining if markets should be classified as developed, emerging, frontier or stand-alone.

The 2019 report included four upgrades — Australia, Italy, Portugal and Spain — and two downgrades — Canada and Spain — in the developed markets. Spain was upgraded on the stability of institutional framework criteria and downgraded for foreign room level.

The downgrade to Canada’s equity market was because of its foreign room level. More than 0.3 per cent of the MSCI Canada investable market index is impacted by low foreign room, the report noted.

In the emerging markets, there were nine upgrades and three downgrades. This included upgrades to the Czech Republic, Egypt, Greece, two upgrades in Malaysia, Qatar, Saudi Arabia, Thailand and the United Arab Emirates. The downgrades included the China A market and two downgrades in Turkey.

The frontier markets saw six upgrades — Croatia, two upgrades in Bahrain, Mauritius, Romania and Oman — and three downgrades — in Bangladesh, Lebanon and Tunisia — due to stability of institutional framework.

In the stand-alone markets, there was one upgrade — Bulgaria — and one downgrade — Palestine.

On June 25, 2019, the MSCI will announce the results of its annual market classification review.