Pakistan's weight in the MSCI FM Index likely to rise to 6.9%

Pakistan's weight in the MSCI FM Index is anticipated to rise from 4.4% to approximately 6.9%, as the upcoming MSCI review is scheduled for February 11, 2025.

According to the latest criteria outlined in the MSCI report from August 2024, companies with an ordinary share market capitalization of $168 million and a free float market capitalization of $69 million will be included in the MSCI Frontier Markets Index. These changes are expected to take effect on March 3, 2025.

Analysts predict that six stocks will be added to the MSCI FM Index. The anticipated additions include Cherat Cement Company Limited (CHCC), Attock Refinery Limited (ATRL), D.G. Khan Cement Company Limited (DGKC), The Searle Company Limited (SEARL), Pioneer Cement Limited (PIOC), and Air Link Communication Limited (AIRLINK).

Arif Habib Limited analysts do not foresee any deletions in the upcoming MSCI Frontier Markets (FM) Index review.

Following these adjustments, the total number of Pakistani constituents in the MSCI FM Index is expected to increase from 21 to 27.

In November 2024, MSCI announced the addition of eight Pakistani companies to its Frontier Market (FM) Small Cap Index, following its November 2024 index review.

Morgan Stanley Capital International (MSCI) is an investment research firm known for its benchmark indexes, including the MSCI Emerging Market Index and the MSCI Frontier Markets Index.

The firm's indexes provide stock indexes, portfolio risk and performance analytics, and governance tools to institutional investors and hedge funds.

In September 2021, Pakistan was downgraded from its status as an emerging market, a little over four years after being reclassified from the Frontier Markets (FM) Index by MSCI.

The downgrade occurred as the Pakistani equity market no longer met the size and liquidity standards for emerging markets, despite meeting market accessibility requirements.