Morgan Stanley Capital International (MSCI) Inc in its results of the November 2023 index review notified that there is no change in constituents for Pakistan in the MSCI Frontier Market Index. However, in the small-cap index, four constituents have been removed, and four new ones have been added.
The changes to the MSCI Frontier Market (FM) index will be effective from November 30, 2023, it said.
The Pakistani companies added to the MSCI FM Small Cap indexes include Agha Steel Industries, AGP, Pak Suzuki Motor Co, and Sazgar Engineering Works. Meanwhile, the companies deleted are Faysal Bank, Kohat Cement, Maple Leaf Cement and Shell Pakistan.
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% to 2.9%,” Topline Securities, a brokerage house, said in a note.
“As per the available information, the weight of a few other countries including Vietnam, Romania and Srilanka have been increased in a range of 0.17% to 1.81%,” said Topline.
“Due to this adjustment, we expect net outflows, but the quantum will be very small,” it added.
Back in August, MSCI in its results of the August 2023 index review announced the addition of a record 56 Pakistani companies as constituents on its Frontier Market (FM) Index and FM Small Cap Indexes.
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 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.