Morgan Stanley to include Pakistan in Frontier Markets 100 Index in May

Morgan Stanley

Morgan Stanley Capital International (MSCI) has made the announcement that Pakistan will be eligible for addition to MSCI Frontier Markets (FM) 100 Index as part of the May 2022 Semi-Annual Index Review (SAIR).

The announcement of MSCI emanates after the decision from its consultation on the aptness of the MSCI Pakistan Index for the MSCI Frontier Markets 100 and MSCI Frontier Markets 15% Country Capped Indexes.

“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),” MSCI has stated in its announcement.

MSCI incorporated the MSCI Pakistan Index in the MSCI Frontier Markets Index in single step concurring with the November 2021 SAIR.

Read more: Morgan Stanley downgrades Pakistan Stock Exchange from emerging to frontier

In September, last year, Pakistan was demoted from its rank as a developing market, a little more than four years when it has been reclassified from the Frontier Markets (FM) Index by MSCI

Moreover, the MSCI had stated then that when the Pakistani equity market tackles the necessities for the accessibility of the market in the classification framework for Emerging Markets, it no longer fulfills the ideals for size and liquidity.

It is to be stated that the weight of Pakistan in the MSCI FM Index is approximately 1.22%.

In the meantime, the latest development could appeal to some much-needed inflows, as Pakistan remains struggling hard to fascinate foreign exchange funds for the fulfillment of its current account needs on account of high import bills.

Head of Research at Ismail Iqbal Securities Limited, Farah Rauf said in a note, “This can attract some/limited foreign inflows. However, the market would continue to be driven by local investors.”

In the interim, all three stocks comprising MCB, LUCK, and HBL will preserve their position in the MSCI Pakistan index.

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