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MSCI

KARACHI: The MSCI has reclassified Pakistan from the Emerging Markets (EM) to Frontier Markets (FM) in stipulated move, assigning 1.25 per cent weight for the constituents of the MSCI FM Index (Standard), which will include Lucky Cement, Habib Bank Limited and MCB Bank Limited.

In addition, the MSCI has announced inclusion of 14 constituents to the FM Small Cap Index. Systems Limited comes out to be a key winner, as it qualified reasonably to become a part of the FM Small Cap Index.

“We believe that the pace of foreign selling will continue to remain in the limelight till the end of November 2021, specifically in the Lucky Cement, Habib bank Limited and MCB Bank Limited, while, Systems Limited’s surprise inclusion will continue to attract some foreign flows in the technology sector,” Wajid Rizvi at JS Global Capital said.

To recall, the MSCI had previously simulated the Oil and Gas Development Company (OGDC) to be part of the Large Cap Index; however, it could not be added to the final list, while Indus Motor Company, Bank Al Habib Limited (BAHL), National Bank of Pakistan (NBP), Packages Limited (PKGS) and Abbott Laboratories were axed from the final MSCI Small Cap list, as well.

This decision will follow consultations of potential inclusion of Pakistan to the MSCI FM 100 Index and MSCI Frontier Markets 15 per cent Country Capped Index. These follow-up consultations are expected to conclude in the MSCI Quarterly Review in February 2022.

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