Global index provider MSCI has upgraded Bulgaria’s capital market to frontier market status from standalone, marking a step up in its classification and potentially boosting investor interest.

The decision, part of MSCI’s 2026 annual market classification review, reflects improvements in the accessibility and investment environment of the Bulgarian market, the Financial Supervision Commission said in a statement on June 24.

The reclassification will take effect in May 2027, when Bulgaria is expected to be included in MSCI’s frontier markets indices.

MSCI said in a statement that the reclassification proposal was originally launched for consultation in 2024, after enough Bulgarian securities met the size and liquidity requirements for frontier markets.

"The decision was subsequently deferred following feedback from international institutional investors, who cited limited market liquidity and the timing of the euro adoption.Since then, conditions have materially improved," the statement said.

"Market participants agreed that liquidity on the Bulgarian Stock Exchange (BSE) has improved meaningfully, supported by a higher number of securities meeting the frontier ,arket size and liquidity requirements and rising turnover. No significant operational challenges were identified following Bulgaria's transition to the euro." 

The move signals growing confidence in the Bulgarian capital market and could increase the international visibility of listed companies, helping attract new investors and facilitate capital raising.

“This is a historic moment for the Bulgarian capital market,” said Manyu Moravenov, chief executive of the Bulgarian Stock Exchange, adding that the upgrade reflects sustained reforms and efforts to improve market infrastructure and access.

MSCI classifies markets into four categories - developed, emerging, frontier and standalone - based on criteria including size, liquidity and market accessibility.