FTSE Russell retains Pakistan on ‘watch list for potential demotion to Frontier market status’

Global index provider FTSE Russell has kept Pakistan on the watch list for potential demotion from Secondary Emerging to Frontier market status.

“Over the last few years, Pakistan has experienced a steady decrease in its index weight within FTSE Russell global benchmarks,” the index provider said in its March 2024 country classification review for equities and fixed income.

“This has resulted in the market failing to meet the minimum investable market capitalisation exit level threshold required to retain a Secondary Emerging market status.”

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FTSE said if Pakistan failed the minimum investable market capitalisation and securities count exit level thresholds, based on data as of the close on Friday, June 28, 2024, then subject to final ratification by the FTSE Russell Index Governance Board, Pakistan would be demoted from Secondary Emerging to Frontier market status.

“This action will be taken in conjunction with the September 2024 index reviews that are effective from the open on Monday 23 September 2024. FTSE Russell will provide an update on the Watch List status of Pakistan at the beginning of July 2024,” it added.

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FTSE Russell is a leading global provider of index and benchmark solutions, spanning diverse asset classes and investment objectives.

The index provider has opted not to downgrade Pakistan’s status in the March’s review. However, the threat still looms of losing the emerging-market status.

In case Pakistan fails the minimum investable market capitalisation and securities, it will be downgraded to the Frontier market status.

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Frontier markets are defined as a list of countries whose economies are comparatively less advanced, and they belong to the developing world. On the other hand, emerging markets include countries that are in the process of becoming a developed economy.