MSCI adds OGDC into Frontier Markets Index, HBL moves to Small Cap

MSCI Inc, a leading provider of critical decision support tools and services for the global investment community, in its semi-annual index review announced addition of Oil & Gas Development Company (OGDC) and deletion of Habib Bank Limited (HBL) from the constituent list of its Frontier Market Index (FM).

Within MSCI FM Small Cap indexes, Engro Polymer Chemicals (EPCL), Habib Bank (HBL) and Indus Motors Company Limited (INDU) have been added, stated MSCI in the note.

The MSCI announced results of the May 2022 Semi-Annual Index Review for the MSCI Equity Indexes — including the MSCI Global Standard, MSCI Global Small Cap and MSCI Micro Cap Indexes, the MSCI Global Value and Growth Indexes, the MSCI Frontier Markets, and MSCI Frontier Markets Small Cap Indexes, the MSCI Global Islamic Indexes.

According to a note from Topline Securities, Pakistan has an estimated weight of ~1% in MSCI FM Index.

It may be mentioned that MSCI has not yet disclosed details on Pakistan's inclusion in MSCI FM 100 and MSCI FM 15% Country Capped Index, which may be shared at a later stage.

MSCI in its last quarterly review in Feb 2022 had announced that Pakistan will become eligible for inclusion in MSCI Frontier Markets (FM) 100 Index as part of the May 2022 Semi-Annual Index Review (SAIR).

“Following feedback received from market participants, Pakistan will become eligible for inclusion in the MSCI Frontier Markets 100 and the MSCI Frontier Markets 15% Country Capped Indexes as part of the May 2022 Semi-Annual Index Review (SAIR),” stated MSCI in its announcement.

Last year, in September, Pakistan was downgraded from its status as an emerging market, a little over four years after it was reclassified from the Frontier Markets (FM) Index by MSCI.

The MSCI had said then that while the Pakistani equity market meets the requirements for market accessibility under the classification framework for Emerging Markets, it no longer meets the standards for size and liquidity.