Potential rights issue will put Dubai Parks in the Mid/Large cap size bracket: On 18 April, Dubai Parks (DUBAIPAR UH) shareholders will vote on a proposed capital increase of AED1.68 bn. The capital increase will take Dubai parks’ (currently a member of MSCI UAE Small Cap Index) market cap (currently cUSD2 bn) above the standard segment cutoff for MSCI UAE (current cUSD2.3 bn).   However migration rules do not necessarily mean an inclusion: In general small cap members need to have a market cap that is 1.5x the cutoff (1.5x USD2.3 bn in the UAE’s case) to migrate to the standard Index, but at MSCI’s discretion a company can be included with 1x-1.5x the cutoff (see migration rule below).  Post rights-issue DUBAIPAR will have a market cap of cUSD2.6 bn (above the segment cutoff for MSCI UAE but below the 1.5x rule) and FIF market cap of cUSD1 bn (above the free float market cap requirement for existing constituent, but below that of new constituents which is cUSD1.2 bn). DUBAIPAR’s inclusion will hence depend on MSCI using the 1x buffer (cUSD2.3 bn) for inclusion and not the 1.5x (cUSD3.45 bn) buffer, as even with the planned rights issue DUBAIPAR’s mcap would still be below the 1.5x buffer and as such there would be no migration to the Mid/large cap index and no MSCI EM inclusion.   May is too early for the rights issue to come into play: With the vote happening on 18 April, we believe that DUBAIPAR’s rights issue will not be considered (if approved) for the May Semi-Annual Index Review (SAIR). The earliest it would be considered for migration (if the rights issue is approved) would then be the August QIR (although the buffer then becomes 1x to 1.8x) or November SAIR.   If DUBAIPAR migrates to the MSCI UAE standard index (hence MSCI EM) we estimate that it would account for 0.03% of MSCI EM, and cUSD75 mn. (Mohamad Al Hajj)