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 MSCI Frontier Market index will be effective from Nov 30, 2023.

The main Frontier Market Index comprises of 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% to 2.9%. As per the available information, weight of few other countries including Vietnam, Romania and Srilanka have been increase in a range of 0.17% to 1.81%.

Due to this adjustment, we expect net outflows but the quantum will be very small.

To highlight, Pakistan was reclassified to MSCI Frontier Market from Emerging Market in Nov 2021 as it did not meet the standards for Size and Liquidity.

Courtesy – Topline Research