MSCI Main Frontier Market Index: Three additions notified for Pakistan

KARACHI: The MSCI has released an update on its Quarterly Index Review, notifying three additions for Pakistan in the MSCI Main Frontier Market Index.

According to MSCI announcement, all changes will be effective from March 1, 2024.

The new additions to the MSCI Main Frontier Market include Bank AL Habib (BAHL), Interloop (ILP), and Sui Northern Gas Pipelines (SNGP).

MSCI raises Indian stocks’ weightage to record high in key index

The main Frontier Market Index now comprises of 20 constituents, including OGDC, MARI, PPL, LUCK, MCB, UBL, ENGRO, HBL, POL, SYS, FFC, HUBC, EFERT, MTL, BAFL, PSO, TRG, BAHL, ILP and SNGP.

In the MSCI Pakistan Frontier Market Small Cap index, 19 new constituents have been added, and 4 constituents have been removed.

The additions to the small-cap index include AICL, AGL, ASL, AKBL, CEPB, FEROZ, GHNI, GHGL, HASCOL, IGIHL, JSBL, MUREB, NCL, PCAL, PSX, SGFL, SSGC, TREET, and WTL, while BIPL, FCCL, PSMC, and SNGP have been removed.

The total number of constituents in the MSCI Pakistan Frontier Market Small Cap index is 56.

After this review, Pakistan’s weight in the Index is expected to be around 3.0 percent, Muhammad Sohail, a leading analyst said. “Due to this adjustment, we anticipate some net flows, although the quantum will not be significant”, he added.

To highlight, Pakistan was reclassified to MSCI Frontier Market from Emerging Market in November 2021 as it did not meet the standards for Size and Liquidity.

An analyst at Arif Habib Limited said that Pakistan weight in MSCI FM standard index is expected to be around3.3 percent.

The KSE-100 index has outperformed all MSCI frontier markets and MSCI FM index during FY24 to-date.

Overall, this review is anticipated to have a neutral impact on the market.

Copyright Business Recorder, 2024