MSCI adds 8 Pakistani companies to Small Cap, removes TRG Pakistan from Frontier Markets Indexes

Morgan Stanley Capital International (MSCI) Inc., a leading provider of critical decision support tools and services, announced the addition of 8 Pakistani companies as constituents on its Frontier Market (FM) Small Cap Index in the results of its November 2024 index review.

One Pakistani company, i.e., TRG Pakistan has been removed from its Frontier Markets Index.

In the MSCI FM Small Cap indexes, eight Pakistani companies have been added, stated MSCI in the note.

These companies include Citi Pharma, Crescent Steel & Allied Products, Fast Cables, Flying Cement Company, Pakistan Oxygen, Shifa International Hospitals, Thatta Cement Company and TRG Pakistan.

Meanwhile, one Pakistani company, i.e., Fauji Fertilizer Bin Qasim has been deleted from the MSCI FM Small Cap indexes.

These changes are to take effect from close on November 25, 2024.

MSCI adds 6 Pakistani companies to Small Cap, 1 to Frontier Markets Indexes

Days ago, Topline Securities in its report said that Pakistan’s weight was likely to increase in the upcoming Morgan Stanley Capital International (MSCI) Quarterly Index Review (QIR).

“Pakistan’s weight to increase by 50-70bps,” said Topline Securities.

“Pakistan’s weight is likely to increase to 5.0-5.2% from earlier 4.4-4.6%…. and increase in market cap of existing constituents by ~12%.”

The brokerage said that due to the expected increase in weight by ~50-70bps and assuming Assets under management (AUM) size of $5 billion tracking MSCI FM index, “we expect gross inflows of $25-30 million”.

“However, since most of the frontier funds are active, so materialization of inflows may vary.”

In September 2021, 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.