ISLAMABAD -A Good News for Pakistan has been reported on the economic front.
Pakistan has retained its May 2017’s upgraded status in Morgan StanleyCapital International (MSCI) Emerging Market Index as it successfullyaverted a likely downgrading to Frontier Market Index.
All three Pakistani large and mid-cap stocks i-e Oil and Gas DevelopmentCompany Limited (OGDC), MCB Bank (MCB) and Habib Bank Limited (HBL)continued to remain part of the MSCI Global Standard Indexes, according tothe Geneva-based firm’s May 2019 Semi-Annual Index Review results that wereannounced in early hours on Tuesday.
There were speculations in the market that Pakistan would have faceddowngrading to Frontier Market Index, or MSCI may initiate consultation forthe possible downgrade in the review, as the three stocks had fallen shortof the set criteria of meeting minimum free-float market capitalisationand/or minimum total market capitalisation.
The continuous sale at the Pakistan Stock Exchange (PSX), especially in thethree stocks, for quite a long time, has reduced their marketcapitalisation from the required one.
“Buffer Rule most likely saved the day for Pakistan whose weight in MSCIEmerging Market Index is now estimated at 0.03pc, down 7-8 basis pointssince its inclusion in June 2017,” Topline Securities CEO Muhammad Sohailsaid told a private media outlet.
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Foreign investors having an estimated $1.5 trillion funds in hand track theMSCI Emerging Market indexes to decide whether to invest or divest in theconstituencies listed at stock markets around the globe.
However, MSCI Inc – a leading provider of research-based indexes andanalytics globally – has deleted three Pakistani stocks from MSCI GlobalSmall Cap Index; Fauji Cement (FFC), Fauji Fertilizer Bin Qasim Limited(FBL) and International Steels (ISL).
The changes will take place at the close of May 28, 2019, it announced.
