Investment research firm and stock markets index provider, Morgan Stanley Capital International (MSCI), has repositioned three Pakistani assets to its Frontier Markets Index.
The reported change will be commissioned with immediate effect from 30 November onwards, according to research published by Topline Securities.
Habib Bank, Lucky Cement, and MCB Bank were reportedly enlisted to the MSCI Frontier Markets Indexes List, and a statement in this regard read:
As previously announced, the MSCI Pakistan Indexes will be reclassified from Emerging Markets to Frontier Markets in one step coinciding with this Index Review. Three Pakistani securities will be added to the MSCI Frontier Markets Index at an aggregate weight of 1.25 percent.
Besides these three stocks, 14 other Pakistani companies have been appended to the MSCI Pakistan Index Frontier Markets small-cap indexes. Topline Securities detailed that these companies are Bank Alfalah, Engro Corporation, Engro Fertilizers, Fauji Fertilizer Co, Hub-Power Co, Mari Petroleum, Millat Tractors, Pakistan Oilfields, Pakistan Petroleum, Pakistan State Oil Co., Searle Pakistan, Systems, TRG Pakistan, and United Bank.
MSCI has already launched a consultation on the potential inclusion of the MSCI Pakistan Index to the MSCI Frontier Markets 100 Index and the MSCI Frontier Markets 15% Country Capped Index as part of the May 2022 Semi-Annual Index Review. The results of this consultation will be announced coinciding with the February 2022 Quarterly Index Review, informed Topline Securities.
Prior to the aforesaid development, the MSCI downgraded Pakistan from its status as an emerging market (EM) to a Frontier Market in September 2021, almost four years after its initial degradation to the higher level.
The Pakistani market also had net foreign outflows of $1.4 billion and only gained by 1.4 percent during its previous tenure in the EM Index as compared to the 26.2 percent return furnished by the MSCI EM index.
The current events (a strengthening economy and the reclassification of the PSX to FM) should help listed companies recoup their share prices.
