MSCI Index Review: No Change in Pakistan’s Market Status

Morgan Stanley Capital International (MSCI) released an update on its November 2023 Index Review, notifying that there is no change in constituents for Pakistan in the MSCI main Frontier Market Index. However, in the small-cap index, four constituents have been removed, and four new constituents have been added. The changes to the MSCI Frontier Market index will be effective from November 30, 2023, according to Topline Securities in a report. The main Frontier Market Index comprises 17 constituents, including OGDC, PPL, MARI, UBL, LUCK, MCB, ENGRO, HBL, HUBC, FFC, SYS, EFERT, POL, MTL, PSO, BAFL, and TRG. In the small-cap index, AGHA, AGP, PSMC, and SAZEW have been added, while FABL, KOHC, MLCF, and SHELL have been removed. The total number of constituents in the small-cap index remains the same at 41. After this November 2023 Index Review, Pakistan’s weight in the Index reduced from 3.2 percent to 2.9 percent. As per the available information, the weight of a few other countries including Vietnam, Romania, and Sri Lanka, has been increasing in a range of 0.17 percent to 1.81 percent. Due to this adjustment, the report expects net outflows but the quantum will be very small. To highlight, Pakistan was reclassified to MSCI Frontier Market from Emerging Market in November 2021 as it did not meet the MSCI standards for size and liquidity.